THE  GREAT  NEWS 


EY  CHARLES  FERGUSON 
THE  RELIGION  OF  DEMOCRACY 
THE  UNIVERSITY  MILITANT 
THE  GREAT  NEWS 


THE  GREAT  NEWS 


BY 

CHARLES  FERGUSON 


NEW  YORK 
MITCHELL  KENNERLEY 

1915 


COPYRIGHT  1915  BY 
MITCHELL  KENNERLEY 


STACK 
ANNEX 

HC 


CONTENTS 

CHAPTER  PAGE 

I.    RISE  OF  A  NEW  WORLD  POWER  1 

II.    PASSING  OF  GOVERNMENT  BY  PROXY  40 

III.  AUTHORITY  OF  THE  ENGINEERS  53 

IV.  MODERNIZING  AMERICAN  POLITICS  80 
V.    FIVE  ACTS  OF  THE  EUROPEAN  TRAGEDY  104 

VI.    CONTROL  OF  WORKING  FORCES  138 

VII.    TRANSPLACEMENT  OF  THE  CENTRE  OF 

SOCIAL  CREDIT  156 

VIII.    UNFITNESS  OF  THE  BUSINESS  SYSTEM 

FOR  PERMANENT  MONOPOLY  179 

IX.    RESURGENCE  OF  WOMAN  204 

X.    SPIRIT  OF  THE  GREAT  SHTPS  222 

XI.    SUMMARY  237 


PREFACE 

DURING  the  year  preceding  the  war, 
the  author  was  employed  by  the 
United  States  government  to  find  out  how 
"big  business"  stood  to  the  state  in  the  prin- 
cipal European  countries.  He  carried  cre- 
dentials from  the  President,  addressed  to  the 
diplomatic  service,  which  gave  him  access  to 
the  best  sources  of  information. 

The  deepest  impression  made  upon  his 
mind  by  this  experience  was  a  sense  of  the 
moral  absurdity  of  the  American  business 
system  in  its  ambiguous  relation  to  the  pub- 
lic powe'r.  He  was  persuaded  by  observa- 
tion of  the  political  and  economic  conditions 
that  have  proved  so  disastrous  to  Europe 
that  the  sway  of  socially  irresponsible  fi- 
nance has  become  intolerable  to  the  world 
and  is  coming  to  an  end ;  and  that  the  busi- 
ness system  of  the  United  States  must  make 
a  quick  choice  between  regeneration  from 


PREFACE 

within,  and  militaristic  discipline  from  with- 
out. 

These  opinions  are  not  to  be  attributed  to 
the  Administration,  but  on  the  author's  re- 
turn to  America  at  the  outbreak  of  the  war 
it  was  arranged  by  the  President  that  he 
should  visit  various  business  communities  in 
this  country  as  a  representative  of  the  Sec- 
retary of  Commerce,  to  suggest  ways  and 
means  for  the  promotion  of  commerce 
through  the  development  of  a  more  scientific 
spirit  within  the  body  of  the  business  organi- 
zation. 

This  book  in  the  main  is  a  reflection  of 
these  public  errands — though  it  contains 
much  that  could  not  possibly  have  any  bear- 
ing upon  an  official  task.  Of  course  nobody 
is  answerable  for  a  word  of  it  but  the  author 
himself. 

No.  15  Gramercy  Park 
New  York 


THE  GREAT  NEWS 


RISE  OF  A  NEW  WORLD  POWER 

EVER  since  the  close  of  the  Napoleonic 
Wars,  our  Western  civilization  has 
been  trying  to  develop  a  world-wide  system 
of  business.  This  development  has  been 
the  distinguishing  characteristic  of  the  era. 
It  is  impossible  to  understand  the  history  of 
the  past  century — its  immense  but  superfi- 
cial success  and  its  recent  stupendous  catas- 
trophe— without  first  fastening  one's  mind 
upon  the  fact  that  it  was  a  century  sepa- 
rated from  all  others  as  the  century  of 
grand-scale  production  and  exchange. 

Now  a  world  organized  for  work — even 
if  badly  organized — is  very  different  from 


2  THE  GREAT  NEWS 

the  kind  of  world  contemplated  by  Hobbes 
and  Locke,  by  Rousseau  and  Montesquieu 
or  by  the  Fathers  of  the  American  Consti- 
tution. A  grand-scale  social  organization 
bent  upon  the  advancement  of  the  arts  and 
sciences  by  an  economy  of  creative  power 
and  the  use  of  tools,  requires  a  high  degree 
of  mobilization,  a  sensitive  adjustment  to 
the  laws  of  natural  evolution  and  a  deliv- 
erance from  the  constraints  of  arbitrary 
law. 

Thus  the  great  adventure  of  the  past  cen- 
tury made  extraordinary  demands.  The  na- 
tions were  in  general  unable  to  meet  those 
demands.  The  consequence  was  calamitous. 

Historians  of  these  times  will  be  per- 
plexed at  the  dearth  of  written  records, 
literary  or  otherwise,  evincing  an  under- 
standing of  the  fact  that  the  system  of  uni- 
versal reciprocities  founded  on  capital, 
credit,  contract  and  corporate  organization, 
is  a  thing  of  spiritual  portent.  They  will  be 
astonished  to  discover  that  the  age  which 
first  elaborated  these  subtle  and  powerful 


agencies  for  the  working  out  of  a  world- 
wide community  of  interest,  did  not  know 
that  it  was  handling  the  stuff  of  a  political 
apocalypse. 

Yet  after  a  while,  and  in  the  long  run,  it 
will  no  doubt  be  clearly  seen  that  the  inter- 
national business  system — in  spite  of  its 
cruelties  and  in  spite  of  its  tragic  miscar- 
riage in  this  last  terrible  year,  is  on  the  whole 
a  serious  effort  of  Western  civilization  to 
escape  from  the  provincialism  of  race  into  a 
spacious  kingdom  of  the  free  spirit.  It 
will  be  seen  that  this  effort  is  the  true  con- 
tinuation of  a  tradition  of  internationalism 
that  since  the  days  of  Pericles  has  had  four 
other  tidal  pulsations. 

First  came  the  spread  of  Roman  Law, 
second,  the  gathering  of  the  nations  into  the 
vast  interracial  institution  of  Pope  Gregory 
VII  and  his  successors;  third,  the  rise  of 
Municipal  Universities  under  the  inspira- 
tion of  Alcuin  and  Anselm,  and  fourth  the 
development  of  that  international  republi- 
canism of  which  Napoleon  said  that  nothing 


%  THE  GREAT  NEWS 

but  the  Cossack  could  keep  it  from  crossing 
all  frontiers. 

The  business  system  has  been  forced  into 
self-contradiction  and  has  brought  disaster 
to  the  world,  because  it  has  not  yet  been 
treated  with  moral  seriousness.  In  Great 
Britain,  France  and  the  United  States  the 
business  man  has  an  ambiguous  status.  The 
feudal  tradition  that  a  gentleman  cannot 
engage  in  "trade"  has  indeed  been  worn  out ; 
nevertheless  it  has  been  taken  for  granted 
that  business  interests  are  private,  not  pub- 
lic. It  has  been  assumed  that  a  business- 
man should  be  "public-spirited"  only  occa- 
sionally, and  that  the  ordinary  range  of  his 
motives  need  not  rise  to  the  moral  level  that 
is  supposed  to  obtain  in  public  office. 

In  all  these  countries  the  business  organi- 
zation has  been,  as  a  matter  of  fact,  the 
chief  and  controlling  power  in  politics.  Yet 
everywhere  the  fiction  has  been  preserved 
that  business  and  politics  must  be  kept  quite 
separate.  Thus  the  relation  of  business  to 


A  NEW  WORLD  POWER       5 

the  public  authority  in  democratic  countries 
has  been  a  labyrinth  of  hypocrisy.  And  this 
hypocrisy  has  now  come  to  its  day  of  judg- 
ment. 

The  career  and  personality  of  Mr.  Theo- 
dore Roosevelt  will  serve  as  well  as  any 
other  paradigm  to  punctuate  the  meaning 
of  what  is  the  matter  with  us. 

Mr.  Roosevelt  dramatizes  the  peculiar  il- 
lusion of  his  time  by  getting  himself  sued 
by  Mr.  Barnes  for  saying  that  the  party 
organizations  in  New  York  are  generally 
guided  and  occasionally  overruled  by  the 
organization  of  business.  Everybody  un- 
derstands, or  could  understand  by  a  little 
consideration  of  the  subject,  that  the  busi- 
ness organization  is  in  its  very  nature  much 
stronger  than  any  political  party.  It  is 
stronger  for  a  variety  of  obvious  reasons, 
among  which  the  following  may  be  named: 

First,  it  operates  all  the  time,  while  the 
party  expresses  itself  only  once  in  a  while. 
Second,  it  deals  with  tangible  things  that 


6  THE  GREAT  NEWS 

people  really  care  about,  while  the  parties 
deal  mostly  in  abstract  ideas  and  vague 
documentary  promises.  Third,  it  settles  the 
material  conditions  of  everybody's  career, 
while  the  parties  settle  little  more  than  the 
careers  of  politicians.  And  fourth,  the 
business  system  has  the  energy  of  continu- 
ous motion  and  adventure,  while  the  parties 
have  only  the  energy  of  criticism  and  resist-' 
ance.  Reasons  might  be  multiplied,  but 
these  will  do. 

Now  the  noteworthy  fact  is,  not  that  Mr. 
Roosevelt  accuses  the  politicians  of  yield- 
ing to  the  business  interests,  but  that  he  per- 
sists in  supposing,  in  the  face  of  a  rich  per- 
sonal experience  to  the  contrary,  that  good 
politicians  like  himself  do  not  yield.  Mr. 
Roosevelt  will  perhaps  go  to  his  grave  in 
the  firm  persuasion  that  business  and  poli- 
tics should  be  kept  in  separate  and  nearly 
water-tight  compartments,  with  a  proviso 
that  strong  and  righteous  persons  like  him- 
self may  be  trusted  to  regulate  a  slight 
osmosis  between  the  two. 


'A  NEW  WORLD  POWER        7 

Jf  the  passing  age  had  not  been  repre- 
sented, and  in  truth  thoroughly  represen- 
table,  by  men  like  Mr.  Roosevelt,  if  it  had 
not  been  peculiarly  well-furnished  with 
acute  and  facile  leaders,  capable  of  versatile 
play  with  the  stiff  formulas  of  consecrated 
thought,  but  wholly  incapable  of  adjusting 
minds  or  morals  to  a  huge  new  actuality 
such  as  the  modern  business  system — prob- 
ably the  age  would  not  have  passed  in  the 
crash  of  a  great  catastrophe. 

The  contention  here  is  that  the  modern 
economy  and  discipline  of  the  world's  pro- 
ductive power,  through  credit,  contract,  cor- 
porate organization  and  a  universal  news 
service — is  the  central  moral  and  intellectual 
adventure  of  modern  times ;  that  this  power 
is  political ;  that  it  lays  hold  of  human  lives 
and  natural  forces  in  such  a  way  that  it  is 
practically  irresistible  by  any  other  political 
force  except  autocracy  and  martial  law ;  and 
that  its  rational  and  self -consistent  develop- 
ment would  give  the  world  permanent  peace 


8  THE  GREAT  NEWS 

and  unexampled  plenty.  On  the  other  hand 
it  is  wholly  due  to  the  perversion  of  this 
system  of  production  and  exchange  that  the 
world  has  been  plunged  into  war ;  and  there 
is  no  reason  for  expecting  that  the  war- 
welter  will  be  brought  to  an  end  until  a  true 
type  of  business  organization  shall  be  pro- 
duced somewhere,  on  a  scale  large  enough  to 
form  a  base  from  which  to  command  the 
whole  circle  of  commerce. 

This  new  principle  of  world-organization 
that  has  been  trying  to  get  itself  expressed 
through  the  industrial  and  commercial  or- 
der, was  featured  in  an  interesting  fashion 
in  Mr.  Norman  Angell's  book,  "The  Great 
Illusion."  Mr.  Angell  took  it  for  granted 
that  the  financial  and  commercial  system 
was  actually  being  operated  in  such  a  man- 
ner that  the  world  had  been  brought  into 
a  single  community  of  interest — so  that  the 
only  danger  of  war  lay  in  a  failure  of  the 
people  of  the  several  nations  to  perceive  this 
accomplished  fact.  His  book  deserved  the 


A  NEW  WORLD  POWER        9 

respectful  consideration  it  received,  because 
it  presented  a  vision  and  a  hope.  But  in 
exposing  a  "great  illusion,"  it  cast  the  spell 
of  a  greater  one.  It  was  bad  enough  that 
plain  unprivileged  people  should  go  on 
thinking  that  wars  might  be  made  finan- 
cially profitable  to  themselves;  but  it  was 
rather  worse  that  they  should  be  lulled  to 
sleep  with  the  sedative  notion  that  the  great 
bankers  of  the  world  were  all  busy  knitting 
up  strong  bonds  of  international  union — at 
the  very  moment  when,  as  a  matter  of  fact, 
they  were  doing  the  opposite  thing. 

The  new  and  regenerative  idea  which  Mr. 
Angell  so  seriously  misstates  is  that  a  vast 
eirenicon,  a  world-wide  common  law  can  be 
and  ought  to  be  worked  out  along  the  lines 
suggested  by  the  existing  international  sys- 
tem of  bank-credits,  free  contracts  and  uni- 
versal news  service.  Mr.  Angell  was  right 
in  suggesting  the  immense  possibilities  that 
are  bound  up  with  a  normal  and  wholesome 
development  of  international  business;  but 
he  failed  to  see  that  the  actual  business  sys- 


10  THE  GREAT  NEWS 

tern  was  developing  in  a  most  abnormal  and 
unwholesome  manner. 

The  corruption  of  the  best  is  the  worst 
corruption.  And  it  is  just  because  the  busi- 
ness system  of  modern  times  sets  out  to  be 
the  finest  and  freest  of  all  social  constitu- 
tions, that  it  has  become  so  monstrous  and 
terrible  in  its  perversion  and  misuse. 

Politics  is  the  massing  of  interests. 

The  political  parties  of  Western  demo- 
cratic countries  have  succeeded  in  massing 
the  interests  of  large  numbers  of  men;  but 
they  have  done  it  in  a  thin  and  formal  man- 
ner. The  common  interests  they  represent 
do  not  go  deep  into  life.  Being  a  Republi- 
can or  a  Democrat  has  nothing  to  do  with 
the  passions  of  the  heart,  and  not  much  to 
do  with  board  and  clothes  and  housing. 

In  the  middle  of  the  nineteenth  century  a 
new  politics  came  into  the  field — but  it  was 
not  called  politics.  A  new  and  very  effec- 
tive way  was  found  to  mass  the  interests 
of  large  numbers  of  men — but  it  was  agreed 


A  NEW  WORLD  POWER      11 

on  all  hands  that  this  kind  of  common  inter- 
est should  be  held  under  political  suspicion. 
This  new  and  effective  massing  of  inter- 
ests was  accomplished  by  the  development 
of  large-scale  industry  and  commerce,  un- 
der a  technology  of  unprecedented  excel- 
lence, and  with  the  aid  of  a  refined  system 
of  credit-accounting,  an  elaboration  of  cor- 
porate devices  and  a  supra-national  finance. 
It  was  accomplished  by  the  creation  of  a 
new  social  tissue  that  wove  all  men  together 
in  a  mesh  of  reciprocal  relations,  so  delicate 
and  tense  that  the  business  of  a  nation — 
even  the  whole  world's  business — came  to  be 
thought  and  spoken  of  as  a  single,  indis- 
soluble process.  And  this  was  a  thing  quite 
new  in  human  history. 

Strange,  is  it  not,  that  students  of  politi- 
cal science  should  have  yielded  their  minds 
so  completely  to  the  illusion  of  names? 
They  generally  failed  to  recognize  the  busi- 
ness organization  as  a  political  power,  and 
its  instigators  and  champions  as  a  political 


12          THE  GREAT  NEWS 

party — because  such  a  manner  of  thinking 
and  speaking  was  socially  tabooed.  The 
tradition  of  democratic  government  had 
grown  up  under  a  cult  of  moral  dualism 
which  required  that  Cincinnatus  should 
leave  the  plough  and  forget  about  food  and 
raiment  when  he  turned  his  mind  to  affairs 
of  state.  It  was  deemed  indelicate,  if  not 
immoral,  that  one  should  mix  his  political 
ideas  with  any  thought  about  making  a  liv- 
ing. Not  only  in  the  best  American  draw- 
ing rooms  but  also  around  the  saw-dust  box 
in  remote  country  stores,  politics  was  re- 
garded as  a  realm  of  Olympian  idealism,  a 
region  of  rarefied  thought  into  which  the 
low-browed  Titans  of  tools  and  trade  were 
not  to  be  permitted  to  ascend. 

It  is  true  that  we  looked  somewhat  du- 
biously upon  the  whole  race  of  politicians; 
but  that  is  to  be  explained  by  the  considera- 
tion that  politicians  are  supposed  to  make 
a  living  by  politics.  And  making  a  living 
seemed  gross. 

It  was  a  hackneyed  saying  that  only  death 


A  NEW  WORLD  POWER      13 

— preferably  mediated  by  assassination — 
could  translate  a  politician  to  statesmanship 
and  remove  the  stigma  that  marked  all  those 
who  handled  familiarly  the  sacred  ark. 

The  bosses,  heelers  and  party  workers 
with  the  endless  processions  of  small  office- 
holders cheerfully  accepted  the  formal  scorn 
of  the  community,  as  a  part  of  the  price  to 
be  paid  for  their  own  comparative  ease  or 
affluence. 

This  political  transcendentalism  cleared 
the  forum  and  the  market-place  for  the  ped- 
estal of  the  "prominent  business-man,"  who 
was  sculptured  in  the  imagination  of  the 
public  as  a  patriot  whose  politics  were  nobly 
esoteric. 

By  means  of  the  system  of  casuistry 
briefly  outlined  above,  it  was  brought  to 
pass  in  the  United  States — also  in  Western 
Europe,  and  indeed  in  all  countries  affected 
by  the  philosophic  dualism  of  traditional 
democracy — that  the  business-man  could  do 
about  as  he  pleased  with  the  politician.  The 


14  THE  GREAT  NEWS 

business  organization  worked  free  in  a  moral 
vacuum.  It  was  practically  without  social 
restraint  or  responsibility.  It  developed  the 
most  subtle  and  the  most  massive  political 
power  known  to  the  history  of  mankind — 
mainly  through  a  jealous  guarding  of  the 
illusion  that  business  has  to  do  only  with  a 
nether  range  of  human  interests,  and  that 
affairs  of  state  are  more  spiritual  and  pre- 
cious than  the  earth-struggle  and  must  not 
be  contaminated  by  beer  and  skittles — no, 
nor  by  bread  and  wine. 

Let  it  be  insisted  upon  that  whatever  men 
may  agree  to  say  or  to  think,  the  fact  re- 
mains that  the  modern  correlation  of  work- 
ing forces  by  means  of  bank-credits,  elec- 
trical communication  and  the  Great  Indus- 
try, is  the  predominant  political  power  in  the 
modern  world.  No  way  has  been  found,  or  is 
likely  to  be  discovered,  whereby  human  inter- 
ests can  be  assembled  with  such  intimacy  of 
correspondence  or  on  so  large  a  scale. 

Whoever  will  take  careful  thought  about 


A  NEW  WORLD  POWER      15 

the  matter  will  find  reason  enough  for  be- 
lieving that  this  wide-spreading  organiza- 
tion for  the  mastery  of  the  difficulties  of 
existence  on  a  somewhat  inclement,  if  not 
wholly  inhospitable,  planet — is  an  organi- 
zation that  has  a  certain  finality.  It  can  be 
improved — it  cries  aloud  to  be  improved — 
but  it  is  not  likely  to  be  superseded  by  any 
other  kind,  any  "higher"  kind  of  organiza- 
tion. 

True  it  is  that  political  philosophers  have 
striven  for  many  ages  to  invent  forms  of  so- 
cial correlation  that  had  little  or  nothing  to 
do  with  the  mastery  of  the  natural  difficul- 
ties of  existence.  At  this  moment  of  poig- 
nant anxiety,  the  air  is  vibrant,  even  more 
than  in  calmer  times,  with  the  voices  of 
eager  prophets,  proclaiming  the  constitu- 
tion and  by-laws  of  a  "world-state." 

The  publisher  of  the  Wall  Street  Journal 
tells  us  that  "this  audacious  war"  is  to  end 
in  the  establishment  of  a  universal  sov- 
ereignty at  the  Hague,  commissioned  to 
operate  a  universal  police-force  from  Heli- 


16  THE  GREAT  NEWS 

goland.  Mr.  Norman  Angell  writes  a  new 
book  to  show  how  the  United  States  of 
America  is  to  mediate  the  making  of  this 
world-federation.  And  the  venerable  Dr. 
Eliot  of  Harvard  publishes  a  great  many 
newspaper  articles  to  the  same  effect.  All 
these  gentlemen  hate  militarism,  and  se- 
riously disapprove  of  the  Kaiser.  Yet  not 
one  of  them  is  able  to  imagine  an  interna- 
tional civil  society  depending  for  the  main- 
tenance of  its  constitutional  law  upon  any 
other  final  sanction  than  an  overwhelming 
military  force.  They  all  think  in  political 
terms  that  are,  or  ought  to  be,  obsolescent. 

The  world  has  had  prolonged  experience 
of  an  ecumenical  institution  that  attempted 
to  establish,  and  to  a  very  great  extent  suc- 
ceeded in  establishing,  a  world-wide  system 
of  law  and  order,  that  did  not  depend  in  the 
last  resort  upon  soldiers  or  policemen. 
Such  was  the  civil  and  administrative  struc- 
ture of  the  Church  of  pre-Reformation 
times.  There  are  analogies  as  has  been  said 


A  NEW  WORLD  POWER      17 

between  that  Church  and  the  great  fabric 
of  industrial  and  commercial  credit  and  con- 
tract that  suffered  such  rending  and  dislo- 
cation in  1914  with  the  outbreak  of  war. 

The  ecclesiastical  polity  of  the  Middle 
Ages  and  the  economic  organization  of  the 
modern  world  have  this  profound  likeness: 
their  main  reliance  for  keeping  order  was, 
or  is,  simply  the  attractiveness  and  desirable- 
ness of  being  on  good  terms  with  the  sys- 
tem. Their  fundamental  sanction  is  not  im- 
prisonment, physical  hurt  or  violent  death — 
as  is  the  case  with  all  extant  national  and 
local  states,  and  also  with  that  imaginary 
world-state  of  the  irresistible  international 
police-force  toward  which  the  pacifists 
mostly  yearn. 

The  Church  that  built  the  cathedrals  and 
the  free  cities,  invented  hospitals,  equity 
jurisprudence  and  public  schools,  that  moth- 
ered the  fine  arts  and  classic  learning  and 
created  the  University — the  Church  that 
housed  the  crafts-guilds  and  merchant- 
guilds  under  a  common  roof  and  sent  its 


18  THE  GREAT  NEWS 

Franciscans,  Benedictines  and  Dominicans 
on  successful  errands  of  imperial  civiliza- 
tion— resembled  the  modern  business  sys- 
tem in  the  remarkable  and  essential  fact 
that  its  order  was  principally  sustained  not 
by  a  common  fear  of  bodily  harm  but  by  a 
common  hope  of  expanded  opportunity. 
The  Church  had  sharp  and  moving  penalties 
for  the  recalcitrant;  but  they  were  penal- 
ties of  a  precisely  opposite  kind  from  those 
our  lawyers  love  to  dwell  upon.  The  Church 
did  not  shut  its  rebels  up ;  it  shut  them  out. 
This  tremendous  and  transforming  po- 
litical idea  of  government  by  attraction  was 
appropriated  by  the  modern  business  sys- 
tem— which,  be  it  remembered,  is  a  king- 
dom that  came  "without  observation  and 
as  a  thief  in  the  night."  The  business  sys- 
tem, like  the  Church  of  Gregory  VII  and 
Ambrose  of  Milan,  has  undertaken  to  es- 
tablish a  catholic  polity  on  the  instigations 
and  compulsions  of  the  constitutional  prin- 
ciple that  the  faithless — those  who  have  no 
credit — shall  be,  not  imprisoned,  but  ex- 


A  NEW  WORLD  POWER      19 

eluded  from  the  power  of  originating  en- 
terprise. 

It  is  of  course  open  to  all  observers  to 
take  notice  that  faith  and  saving  works  were 
faultily  defined  even  in  the  most  spacious 
days  of  the  Church,  and  that  its  constitution 
was  grievously  impaired  thereby,  and  even- 
tually brought  to  ruin.  A  similar  remark 
may  be  made  concerning  the  definition  and 
administration  of  credit  and  good-will  in  our 
actual  organization  of  finance  and  industry. 

But  one  should  distinguish  between  the 
essence  of  a  principle  and  the  accidents  that 
befall  it  in  the  historic  melee.  The  principle 
that  order  can  be  maintained  in  a  vast  social 
system,  without  main  dependency  upon  or- 
ganized violence — by  the  mere  momentum  of 
a  central  current  of  enterprise — has  been 
historically  established — if  any  principle  has 
been  historically  established. 

The  modern  constitutional  state,  as  ex- 
emplified in  America  and  Western  Europe, 
can  never  be  understood  by  anybody  who  is 


20  THE  GREAT  NEWS 

satisfied  with  it.  For  it  is  at  best  an  ad- 
mirable but  temporary  contrivance.  It  is  a 
revolutionary  state.  Its  best  symbol  is  a 
barricade.  On  one  side,  behind  the  heaped 
cobblestones  and  wedged  timbers  of  the 
Constitution,  is  the  Modern  Spirit  which 
hates  arbitrary  law,  and  will  clear  a  space 
for  a  law  that  is  not  arbitrary  but  intrinsic 
— the  law  that  in  the  nature  of  things  con- 
ditions the  building  of  cities.  On  the  other 
side  of  the  barricade  are,  if  you  please,  the 
Stuarts,  the  Hanoverians  and  the  Bourbons. 
The  barricade  is  not  self-explanatory.  It  is 
not  a  feature  of  nature  or  a  work  of  decora- 
tive art.  The  Constitution  is  explained  by 
what  is  on  the  back  side  of  it.  It  was  built 
by  able  lawyers  to  restrict  the  operations  of 
arbitrary  law.  The  constitutions  were 
framed  as  a  summation  of  the  results  of 
the  English  Revolution,  the  American 
Revolution  and  the  French  Revolution. 

It  is  a  grave  misfortune  that  we  have  been 
permitted  to  forget  that  we  are  living  under 
a  revolutionary  government  in  a  revolution- 


A  NEW  WORLD  POWER      21 

ary  state.  We  should  all  have  been  taught 
in  the  public  schools  that  the  barricade  is 
temporarily  useful,  but  not  eternal,  and  that 
it  will  not  be  permanently  necessary  to  cut 
our  lives  in  two,  giving  part  to  Bourbonism 
— tempered  by  parliamentary  talk — and 
only  the  residue  to  real  self-government. 

We  should  have  been  told  by  our  teach- 
ers that  the  large  tract  of  our  social  life  that 
lies  outside  the  narrow  constitutional  beat 
of  the  policeman,  is  not  reserved  for  private 
exploitation  and  personal  irresponsibility; 
that,  on  the  contrary,  this  unpoliced  part  is 
the  most  public  and  the  most  important  part 
— that  here  is  to  be  organized,  as  swiftly  as 
possible,  a  new  and  transforming  politics, 
destined  to  fulfil  the  true  historic  purpose 
of  the  revolutionary  states  by  sweeping 
away  their  barricades  and  claiming  the 
whole  area  of  modern  life  for  the  laws  of 
art  and  science. 

What  a  pity  that  it  was  not  even  men- 
tioned to  us  in  our  impressionable  youth 


22  THE  GREAT  NEWS 

that  the  public  schools  of  the  United  States 
are  kept  out  of  the  old  party  politics  in  or- 
der that  they  may  become  the  luminous  foci 
or  rallying  points  of  the  world-storming 
party  of  creative  enterprise! 

Why  is  it  that  nobody  has  pointed  out 
the  fact  that  public  education  in  America 
is  not  thought  of  as  an  affair  of  state — as 
it  was  in  the  Roman  Empire,  and  as  it  is  to 
this  day  on  the  continent  of  Europe — but 
rather  as  a  primary  social  interest  that 
statesmen  must  admire  but  must  not  meddle 
with?  This  fact  is  signalized  by  the  grant- 
ing to  the  school  system  in  Pennsylvania 
and  other  commonwealths  of  something  like 
an  independent  taxing-power;  and  by  the 
general  intent  throughout  the  country  to 
make  the  fiscal  basis  of  the  system  as  free 
as  possible  from  the  fluctuations  of  party 
politics. 

The  moral  drive,  the  teleology  of  history, 
requires  that  our  revolutionary  government 
shall  be  transmuted  and  mobilized  into  an 


A  NEW  WORLD  POWER      23 

evolutionary  government.  To  autocrats  and 
aristocracies  the  political  problem  is  a  ques- 
tion of  the  maintenance  of  a  substantive  so- 
cial convention,  the  preservation  of  a  status 
quo.  But  in  a  democracy  the  problem 
should  be  stated  not  in  static  terms  but  in 
dynamic  terms.  The  fundamental  political 
question — conditioning  all  other  political 
questions — is:  How  best  can  we  mobilize 
the  creative  forces  for  the  raising  of  the  gen- 
eral standard  of  living? 

Thus  the  political  problem  in  a  democracy 
is  a  problem  in  engineering.  The  whole 
materiel  of  civilization  takes  on  the  aspect  of 
tools;  no  property  right  can  be  regarded  as 
in  itself  an  end,  or  object  of  devotion.  In 
the  last  accounting  the  tools  belong  to  those 
that  can  use  them  best  for  the  increase  of 
the  social  income.  Nobody  can  have  a  right 
to  damage  or  diminish  the  estate  of  the  com- 
monwealth. Nature  is  too  exigent  for  that. 
The  business  of  making  the  deserts  blossom 
is  too  dangerous  and  difficult. 

The  human  race  has  never  yet,  for  a  sin- 


24  THE  GREAT  NEWS 

gle  day,  had  enough  to  eat  or  sufficient 
clothing  or  shelter.  And  the  bottom  reason 
of  this  dearth  is  that  the  struggle  to  rightly 
divide  the  goods  and  honors  of  the  world, 
according  to  one  or  another  standard  of 
absolute  justice,  has  always  absorbed  so 
large  a  percentage  of  the  emotional  energy 
of  the  race  that  it  has  never  had  enough 
driving  force  left  to  produce  the  physical 
necessaries  of  existence. 

If  sociology  had  really  become  a  science, 
and  if  its  adepts  were  furnished  with  some 
dynamometer  by  means  of  which  one  could 
register  the  amount  of  nervous  force  that  a 
nation  habitually  spends  in  producing  goods, 
and  on  the  other  hand  the  amount  it  spends 
in  deciding  who  shall  enjoy  them — it  would 
then  be  possible  to  definitely  fix  the  rank 
of  the  several  countries  of  the  earth  in  the 
scale  of  civilization.  For  the  country  where 
people  care  most  for  the  advancement  of, 
the  arts  and  sciences,  and  least  for  an  exact 
distributive  justice,  is  the  richest  and  the 


A  NEW  WORLD  POWER      25 

strongest,  for  peace  or  war — and  excels  all 
others  in  intellect  and  magnanimity.  This 
is  a  practical  truth.  It  has  been  expressed 
in  perfect  form  in  the  New  Testament  and 
has  been  amply  illustrated  in  the  rise,  from 
time  to  time,  of  many  splendid  cities ;  but  it 
has  generally  eluded  the  clergy  and  the  legal 
profession  and  it  still  awaits  disclosure  to  the 
ordinary  intelligence  of  mankind.  It  is  the 
pith  of  the  solution  of  the  social  problem. 

The  unhappy  and  unsuccessful  ages  are 
those  in  which  the  air  is  full  of  the  impor- 
tunate cries  of  reforming  sects  and  parties, 
each  bent  upon  applying  some  new  rule  of 
righteousness  in  the  apportionment  of  the 
good  things  of  life  between  man  and  man 
— and  all  uniting  with  cumulative  fervor  to 
distract  the  mind  and  energy  of  the  people 
from  the  business  of  producing  good  things. 

Thus  the  reformers  kill  the  goose  that  lays 
the  golden  egg.  They  produce  not  only  an 
economic  prostration  but  also  a  poverty  that 
beggars  the  intellect  and  dispossesses  the 
soul. 


26  THE  GREAT  NEWS 

The  first  law  of  political  economy — if  po- 
litical economy  is  to  quit  its  fruitless  fatal- 
ism and  turn  its  mind  to  the  making  of  his- 
tory— may  be  formulated  in  some  such 
manner  r.s  this :  The  rights  of  private  prop- 
erty are  all  relative  and  provisional ;  the  ab- 
solute thing  is  the  right  of  society  to  mass  its 
skill  and  knowledge  and  to  go  ahead  and  get 
rich;  to  make  private  property  absolute  is 
to  stop  the  wheels  of  production. 

Thus  the  idea  that  lies  at  the  heart  of  an 
affirmative  political  economy  is  also  the  quin- 
tessence of  the  business  system.  Business 
has  been  befuddled  by  the  lawyers,  but  in  its 
hidden  soul  it  hates  all  kinds  of  absolutism, 
except  the  absolute  right  of  the  "going  con- 
cern" to  go.  The  men  who  represent  the 
real  genius  of  modern  business  are  perfectly 
willing  that  questions  of  property  should  be 
regarded  as  details  of  the  general  engineer- 
ing problem,  to  be  decided  on  the  principle 
that  engines  should  be  run  by  those  who  can 
run  them. 

Your  authentic  business  man  thinks  of  his 


A  NEW  WORLD  POWER      27 

material  possessions  as  temporary  precipita- 
tions of  his  social  strength,  easily  convertible 
back  into  the  fine  effluence  of  decision  and 
enterprise,  which  is  what  he  really  cares 
about.  His  personal  dignity  is  in  his  credit 
at  the  bank — the  social  assessment  of  the 
magnitude  of  his  truthworthiness  in  the  pro- 
ductive process. 

The  day  of  the  paramount  landlord  has 
passed  away.  In  general  the  pride  of  per- 
sonality does  not  any  longer  express  itself 
in  adding  house  to  house  and  field  to  field. 
The  pride  of  men  in  the  mastery  of  materials 
has  become  subtle  and  spiritual.  The  cate- 
gories of  wealth  in  our  day  are  not  Ptole- 
maic but  Copernican.  Wealth  has  now  no 
settled  basis;  it  has  only  balance,  and  a  stu- 
pendous orbit.  The  economy  of  universal 
credit  and  contract  has  destroyed  the  abso- 
luteness of  property. 

But  the  lawyers,  for  the  most  part,  stay 
with  Ptolemy.  For  example,  Mr.  Elihu 
Root — who  in  all  innocence  has  perhaps 


28  THE  GREAT  NEWS 

done  as  much  as  any  man  living  to  bewilder 
the  business  world — declares  earnestly  from 
the  chair  at  the  opening  session  of  the  Con- 
stitutional Convention  of  the  State  of  New 
York,  that  property  is  grounded  in  the 
eternal  nature  of  things  and  that  the  Consti- 
tution rests  upon  this  Atlas,  elephant  or  tor- 
toise. 

It  was  the  philosopher  John  Locke  who 
first  clearly  formulated  this  idea  of  natural 
property  as  a  thing  antecedent  to  all  social 
arrangements.  Locke  was  excusable.  He 
lived  in  an  age  of  petty  handicraft,  before 
the  beginnings  of  the  Great  Industry. 
Moreover  he  was  trying  hard  to  find  an  in- 
tellectual basis  for  the  limitation  of  the 
power  of  kings.  He  was  the  champion  of 
the  limitation  of  monarchy,  and  there  was  no 
better  hook  for  the  jaw  of  Behemoth  than 
this  idea  that  property  came  before  prime 
ministers.  It  put  a  brake  on  taxation  and 
justified  John  Hampden.  A  great  deal  of 
history  goes  with  Locke's  idea.  It  was  hope- 
less to  pull  against  the  absolutism  of  princes 


A  NEW  WORLD  POWER      29 

without  setting  up  an  opposite  absolutism 
to  pull  from. 

But  this  latter  absolutism — that  of  pri- 
vate property — was  only  a  part  of  the  gear 
and  tackling  of  the  revolutionary  tug-of- 
war.  If  the  lawyers  of  the  nineteenth  cen- 
tury in  Western  Europe  and  America  had 
been  social  philosophers,  they  would  have 
allowed  this  relic  of  the  revolution  to  fall 
into  gradual  and  harmless  desuetude. 
Thomas  Jefferson  gave  the  right  hint.  In 
his  short  list  of  the  inalienable  rights  of  man, 
he  did  not  mention  the  right  of  property. 
But  the  high  courts  of  the  young  republic 
were  mostly  counselled  and  presided  over 
by  logicians  who  were  neither  first-rate 
thinkers  nor  observers.  They  did  not  notice 
the  fact  that  the  development  of  credit,  con- 
tractualism  and  corporate  finance  was  com- 
pelling the  whole  fabric  of  wealth  to  break 
loose  from  nature  and  become  a  kind  of  pro- 
digious work  of  art.  They  did  not  perceive 
that  property  had  ceased  to  be  a  quiddity 
and  had  become  a  relationship. 


30  THE  GREAT  NEWS 

Then,  after  the  best  chances  for  moderniz- 
ing the  common  law  to  make  it  suit  the  con- 
ditions of  a  mobile  order,  had  slipped  by — 
there  arose  a  race  of  corporation  attorneys 
dating  back  to  Daniel  Webster  and  the 
Dartmouth  College  case — who  served  the 
short  run  interests  of  the  corporate  structure 
by  establishing  legal  legends  and  supersti- 
tions that  deadlocked  its  long-run  interests. 

As  a  product  of  history  the  revolutionary 
state  of  our  inheritance  is,  as  has  been  said, 
a  double-minded  and  hybrid  thing.  This 
was  necessarily  the  case,  because  absolutism 
— the  hunger  and  thirst  for  surcease  of 
thought  and  moral  adventure  and  for  rest 
upon  a  moveless  and  unquestionable  stand- 
ard of  right — is  an  inveterate  perversity  or 
infirmity  of  the  common  mind. 

The  revolutionary  societies  were  born  out 
of  a  revelation  vouchsafed  to  men  of  genius 
that  the  true  criterion  of  right  and  wrong  is 
not  to  be  found  elsewhere  than  in  the  sanity 
and  integrity  of  the  human  spirit  as  it  ad- 
dresses itself,  out-of-doors,  to  the  practical 


A  NEW  WORLD  POWER      31 

problem  of  the  earth-struggle.  But  it  was 
impossible  for  any  mass  of  men  to  pass  pre- 
cipitately and  without  mediation,  from  the 
mental  cosiness  and  enervation  of  the  absolu- 
tist state,  to  the  rousing  realities  of  self-gov- 
ernment. And  it  was  an  incalculable  mis- 
fortune that  the  negotiators  of  the  transition 
— men  like  Alexander  Hamilton — were  so 
much  more  concerned  about  the  indispen- 
sable shell  and  integument  of  the  new  order 
than  they  were  about  the  vitality  of  the  ker- 
nel. To  conceive  of  the  government  of  the 
modern  free  state  as  merely  a  powerful  set 
of  conventions  for  the  maintenance  of  pri- 
mordial rights  of  property,  was  to  sterilize 
the  seed  of  democracy. 

The  present  dangerous  antagonism  in  this 
country  between  the  old  political  power  and 
the  business  organization  is  due,  in  the  first 
instance,  to  an  abortive  development  of  the 
former.  Both  are  distressfully  abnormal; 
but  the  perversion  of  politics  preceded  that 
of  business. 


32  THE  GREAT  NEWS 

Our  governmental  system  has  been  treated 
as  if  it  had  literally  nothing  to  do  with 
the  huge  social  activities  that  have  conquered 
the  continent  and  that  have  occupied  nearly 
all  the  working  days  of  nearly  all  the  peo- 
ple— except  to  sit  under  a  tree  at  sundown, 
like  an  oriental  cadi,  to  decide  who  has 
broken  the  mystic  and  ceremonial  law  of 
pure  property.  Thus  the  corruption  of  busi- 
ness is  primarily  due  to  the  fact  that  it  has 
always  been  put  on  the  defensive.  No 
prophet  has  ever  arisen  to  demand  that  the 
business  world  should  create  its  own  organs 
of  judgment  and  self-control.  It  has  woven 
a  strong  net  of  economic  interdependence 
that  takes  in  everybody  and  comprehends 
nine-tenths  of  the  ordinary  interests  of  all 
the  people.  Yet  it  has  lived  the  political 
life  of  unfranchised  women,  minors  and 
gypsies. 

If  the  business  man  has  practised  craft 
and  guile  in  his  relations  with  the  public 
power,  no  psychologist  could  have  expected 


A  NEW  WORLD  POWER      33 

anything  else.  A  predominant  interest  that 
is  not  openly  acknowledged  as  a  public 
power  will  necessarily  be  dangerous  to  the 
public  power.  Thus  the  business  system 
has  been  warped  and  demoralized  by  its 
struggle  with  the  state.  And  it  has  demor- 
alized the  state.  The  demoralization  of  the 
state  goes  deeper  than  the  corruption  of 
politicians  or  the  misuse  of  money  in  poli- 
tics. The  modern  democratic  state,  in  its 
contact  with  the  powerful  and  politically  ir- 
responsible organization  of  modern  business, 
has  suffered  a  degeneration  of  all  its  tissues. 
The  whole  structure  of  its  law  has  been  de- 
vitalized and  stiffened  into  a  kind  of  rigor 
mortis.  It  has  fallen  into  a  bloodless,  insen- 
sitive formalism — "a  methodical  ignorance 
of  what  everybody  knows." 

The  cunning  of  corporation  lawyers  has 
destroyed  the  vigor  of  law  by  the  sublima- 
tion of  its  form  and  letter.  The  mystical 
doctrines  of  the  transcendent  sacredness  of 
sovereignty  and  sacredness  of  property — 
doctrines  utterly  uncongenial  to  the  spirit 


34.  THE  GREAT  NEWS 

of  economic  enterprise  and  inimical  to  its 
wholesome  development — have  been  seized 
upon  by  the  legal  champions  of  business  as 
weapons  to  beat  down  the  power  of  politics. 
The  result  has  been  equally  disastrous  to 
politics  and  to  business. 

It  is  of  the  very  nature  of  modern  busi- 
ness— with  its  credit  structure,  its  swift  com- 
munications and  its  highly  differentiated  di- 
vision of  labor — to  work  out  into  a  wide- 
spreading  community  of  interest.  Your  old- 
school  democratic  statesman  declares,  with 
sufficient  logic,  but  insufficient  sense  of  re- 
alities: "This  must  not  be,  because  the  state 
is  itself  an  inclusive  community  of  interest 
and  it  would  not  be  possible  for  the  state  to 
endure,  if  it  brooked  a  rival  in  its  own  field." 

The  corporation  attorney  says :  "The  phi- 
losophy of  the  democratic  statesman  is  per- 
fectly sound,  therefore  it  is  necessary  to 
deny  the  nature  of  modern  business  and  to 
assume,  by  a  fiction,  that  it  has  no  invincible 
tendency  toward  community  of  interest;  let 


the  political  power  be  also  reduced  to  a  fic- 
tion by  giving  property  and  the  police  force 
a  transfiguration  that  will  remove  them  be- 
yond the  meddling  reach  of  law-makers; 
thus  it  will  be  possible  for  business  to  pursue 
its  uninterrupted  course." 

The  simple  truth  is  that  the  rise  of  mod- 
ern business  is  a  fact  of  such  proportions 
that  corporation  lawyers  and  old-school 
statesmen  are  generally  quite  incompetent 
to  deal  with  it.  The  community  of  business 
interests,  being  intrinsically  stronger  than 
any  other  extant  political  agency,  cannot 
be  broken  in  pieces  by  any  force  that  the 
state  is  able  to  command — except  military 
autocracy  and  war.  On  the  other  hand  it 
is  becoming  evident  that  this  new  power  of 
unsocialized  finance,  if  allowed  to  develop 
further  in  an  atmosphere  of  moral  nullity 
and  legal  fiction,  is  capable  of  the  works  of 
the  very  devil — even  to  the  destruction  of 
society  itself. 

The  situation  is  an  absolute  deadlock; 
there  is  no  possible  solution  along  any  fa- 


36  THE  GREAT  NEWS 

miliar  line  of  procedure.  It  is  necessary 
therefore  to  escape  from  familiar  categories, 
and  to  strike  out  a  path  of  fresh  adventure. 
Those  who  have  sense  to  see  that  universal 
political  wreckage  must  follow  upon  the  de- 
velopment of  a  business  system  that  is  in 
effect  a  paramount  political  power  without 
political  responsibility,  do  not  need  to 
argue.  They  have  only  to  wait  a  little. 
Their  point  is  being  amply  proved  by  the 
daily  news  from  every  quarter  of  the  globe. 
And  when  these  comparatively  intelligent 
people,  capable  of  perceiving  the  force  of  a 
staring  axiom,  declare  that  since  the  busi- 
ness system  cannot  be  abolished  it  ought  to 
be  made  human  and  scientific — they  need  not 
assume  the  whole  burden  of  explaining  in 
advance  just  how  the  necessary  thing  is  to 
be  done.  When  there  is  only  one  way  out  of 
an  intolerable  situation,  the  burden  of  proof 
lies  upon  those  who  refuse  to  take  that  way. 

Of  course  it  is  not  apparent  to  everybody 
that  the  world  has  been  plunged  into  eco- 


A  NEW  WORLD  POWER      37 

nomic  distress  and  war  by  the  dislocation  of 
the  industrial  and  commercial  order,  and 
therefore  not  apparent  that  the  only  possible 
exit  from  our  troubles  is  through  the  inte- 
gration of  that  order.  To  perceive  these 
things  it  is  necessary  to  understand  that  the 
modern  development  of  a  world-wide  work- 
ing organization  has  ushered  in  a  new  politi- 
cal era,  to  which  the  old  fashions  and  formu- 
las of  politics  do  not  apply,  and  that  when 
people  are  organized  for  work,  even  in  an 
imperfect  manner,  they  are  put  in  such  rela- 
tions to  the  forces  of  nature,  and  are  so 
firmly  bound  together  in  matters  that  they 
really  care  about,  that  their  association  is 
incomparably  strong,  in  contrast  with  all 
other  forms  of  association.  This  is  not  to 
say  that  man  is  "an  economic  animal"  or 
that  the  closest  fellowship  is  that  of  the 
stomach.  To  say  or  think  that  is  entirely 
to  miss  the  point  of  the  Incarnation  and  the 
sacrament  of  bread  and  wine.  The  point  is 
that  it  is  only  in  the  handling  of  the  stuff 
and  substance  of  the  real  world  that  the  finer 


38  THE  GREAT  NEWS 

intellectual  and  spiritual  faculties  are  quick- 
ened into  life.  Thus  the  community  of  in- 
terest created  by  the  processes  of  industry 
and  commerce  is,  in  spite  of  monstrous 
abuses,  more  nearly  a  holy  communion  than 
is  any  other. 

A  renaissance  in  politics  is  always  at  bot- 
tom a  revival  in  religion — a  freshening  of 
primary  perceptions  about  the  meaning  of 
life.  So  it  is  quite  impossible  to  appraise 
the  value  and  potency  of  our  new-born  and 
unprecedented  working-organization,  un- 
less one  is  awake  to  the  fact  that  it  involves 
the  emotional  energies  of  the  race,  with  all 
the  finer  arts  and  spiritual  graces.  It  is  not 
enough  to  say  that  the  working-organiza- 
tion ought  to  involve  these  great  interests ;  it 
actually  and  inevitably  does  so.  For  they 
cannot  be  effectually  and  permanently  in- 
volved in  any  other  way  than  by  a  social 
combination  for  the  creation  of  goods.  That 
is  the  substantial  reason  why  this  new  kind 
of  politics  is  stronger  than  any  of  the  old 
kinds. 


A  NEW  WORLD  POWER      89 

Our  traditional  politics  lacks  blood  and 
bone.  It  affects  an  ascetic  contempt  of  ma- 
terial interests  and  assumes  that  good  citi- 
zens go  to  the  polls  in  a  kind  of  rapture  of 
self-abnegation.  It  rests  on  the  ghostly  as- 
sumption that  people  can  be  continuously 
interested  in  getting  together  on  a  disinter- 
ested basis. 

No  man  or  nation  can  be  committed  to  the 
sentimental  top-loftiness  that  our  ancestral 
political  theory  requires  without  balancing 
himself  off  with  some  kind  of  brutality.  It 
is  impossible  on  the  other  hand  to  be  consist- 
ently sensitive  and  considerate  of  others, 
without  an  unexceptional  confession  of  per- 
sonal interest. 

The  jobbery  of  "the  gang"  is  the  natural 
recoil  of  platonic  politics;  and  nations  leap 
to  war  to  escape  from  the  hypocrisies  of 
peace. 


II 

PASSING  OF  GOVERNMENT  BY  PROXY 

THE  business  system  is  closer  to  the  na- 
ture of  men  and  the  nature  of  things 
than  any  political  party  founded  on  abstract 
principles  can  possibly  be.  The  incurable 
vice  of  our  hereditary  politics  is  that  it  re- 
quires of  its  votary  that  he  shall  be  methodi- 
cally double-minded,  that  his  life  as  an  ex- 
emplary citizen  or  a  public  official  shall  be 
oath-bound  to  a  set  of  feelings  and  interests 
that  are  not  keyed  to  his  natural  constitu- 
tion. The  difficulty  is  not  merely  that  of 
the  conscience-stricken  sheriff  who  conscien- 
tiously adjusts  the  noose.  It  goes  much 
deeper  than  that.  For  the  whole  fabric  of 
consecrated  political  power  is  built  upon  the 
impossible  assumption — derived  from  an 
ancient  and  unscientific  psychology  and  pre- 
served through  the  ages  by  an  academic  tra- 

40 


GOVERNMENT   BY   PROXY     41 

dition — that  disembodied  ideas  can  have  a 
real  existence. 

Let  it  be  repeated  and  insisted  upon  that 
it  is  scholastic  platonism  to  declare  that  we 
are  bound  to  have  a  government,  "not  of 
men,  but  of  laws,"  and  thereupon  to  set  to 
work  with  all  diligence  to  clear  the  unsophis- 
ticated humanness  out  of  everybody  who  has 
to  do  with  the  administration  of  the  legal 
system. 

The  orthodox  theory  of  "representative" 
government  as  expounded,  say,  by  Mr.  Taft 
and  Mr.  Root,  undertakes  to  do  almost,  if 
not  precisely,  this.  It  imagines  that  intellect 
and  conscience  can  be  torn,  bleeding,  from 
the  hearts  of  men,  and  set  coolly  apart  in  a 
court  or  cabinet  to  govern  the  passions  of 
the  soul.  The  monks  of  the  Thebaid  tried 
something  of  the  sort ;  and  the  hope  that  Mr. 
Root  and  Mr.  Taft  may  succeed  in  their  en- 
deavor is  fortified  by  nothing  but  a  dwin- 
dling, ecclesiastical  tradition. 

It  was  left  for  modern  psychology  to 
state  in  scientific  form  a  truth,  which  men  of 


42  THE  GREAT  NEWS 

genius  in  all  ages  have  illustrated  in  their 
careers  and  have  sometimes  understood; 
namely,  that  high  mentality  grows  out  of 
strong  and  steady  emotion.  It  is  emotion 
heated  to  a  kind  of  incandescence  and  so 
transmuted  into  light. 

It  now  appears  that  the  attempt  to  cut 
the  intellect  loose  from  the  heart  of  life  can- 
not end  otherwise  than  in  imbecility,  that 
there  is  no  such  thing  as  acromatic  intellect, 
and  that  Plato's  dream  is  a  delusion.  Those 
who  would  govern  nations  by  cold  and  col- 
orless brains  and  consciences  can  do  only 
mischief  and  reap  disappointment. 

It  is  to  be  noted  that  the  natural  humor 
of  Mr.  Taft  and  Mr.  Root  compels  them  to 
abate  somewhat  the  logical  rigor  of  their 
argument  for  purely  abstract  law  and  purely 
impersonal  authority.  They  seem  to  feel 
that  there  must  be  somewhere  in  the  frigid 
hierarchy  of  officialdom  a  saving  remnant 
of  real  personalities.  Therefore  they  decide, 
somewhat  whimsically  perhaps,  that  judges, 
at  least,  ought  to  be  something  more  than 


GOVERNMENT    BY   PROXY     43 

representatives  of  other  people — that  judges 
ought  to  have  an  indefeasible  character  as 
representatives  not  of  persons,  but  of  prop- 
erty. 

Mr.  Roosevelt  also  is  a  zealot  for  the  or- 
thodox doctrine  that  the  people  should  rule 
by  the  hands  of  entirely  depersonalized  del- 
egates, though  he  makes  an  amiable  and  ob- 
vious reservation  in  his  own  behalf. 

Now  it  would  be  difficult  to  discredit — as 
it  deserves  to  be  discredited — this  classic 
ideology  of  contemporary  politics,  if  its 
weakness  had  not  been  exposed  at  every 
point  of  its  contact  with  the  business  sys- 
tem. There  is  implicit  in  the  modern  sys- 
tem of  business  enterprise,  a  new  and  prag- 
matic politics  that  grips  the  earth  with 
passion  and  power,  just  because  it  is  com- 
paratively free  from  the  morbid  idealism  of 
the  old  order.  Men  rise  to  places  of  au- 
thority in  the  business  world,  not  by  election 
of  majorities  but  by  contractual  selection. 
If  one  has  power  there,  he  has  it  in  propria 


44  THE  GREAT  NEWS 

persona  and  not  in  virtue  of  any  delegation. 
His  action  is  direct  and  personal;  he  is  not 
embarrassed  by  a  double  consciousness. 

In  some  respects  the  actual  state  of  the 
business  organization  is  pathological,  in  oth- 
ers it  is  inchoate  and  undeveloped.  Either 
way,  it  is  necessary  to  distinguish  between 
the  essentials  of  the  system  and  their  con- 
fused and  imperfect  manifestations.  With 
this  consideration  in  mind,  one  should  note 
that  the  most  characteristic  thing  about  the 
regime  of  business  is  its  aversion  to  arbitrary 
laws  and  to  the  rule  of  abstract  theories.  It 
is  determined,  in  its  ground-plan,  to  be  ruled 
by  laws  that  are  not  arbitrary  or  extraneous 
but  essential  and  self-vindicating.  It  will 
make  free  use  of  the  imagination  to  extend 
the  frontiers  of  enterprise,  but  it  refuses  to 
be  governed  or  constricted  by  fine  ideas. 

It  should  be  readily  admitted  that  busi- 
ness men  in  general  have  not  formulated  a 
philosophy  of  business,  and  are  only  dimly 
conscious  of  the  world-changing  spirit  of  the 
new  order  they  are  trying  to  administer. 


GOVERNMENT   BY   PROXY     45 

Perhaps  it  is  always  the  case  in  matters  of 
the  first  importance  that  the  creative  impulse 
precedes  the  theory  of  it.  The  thing  is  done, 
or  half  done,  before  anybody  thinks  about 
explaining  it. 

This  fact  that  the  business  order  is  a  spon- 
taneous and  unmeditated  creation,  is  a  part 
of  the  reason  why  it  is  stronger  than  the 
system  that  was  thought  out  by  a  company 
of  lawyers  and  country  gentlemen  meeting 
in  a  hall  in  Philadelphia  during  a  series  of 
hot,  summer  afternoons.  The  fathers  of  the 
Constitution  were  instructed  and  intelligent 
men ;  but  it  happened  that  neither  they  nor 
their  exemplars  in  France  and  England,  or 
in  Athens  and  Sparta,  had  any  clear  con- 
ception of  the  political  power  that  inheres  in 
the  mastery  of  economic  forces  and  the  or- 
derly control  of  tools. 

It  is  not  necessary  at  this  day  that  one 
should  be  as  sagacious  as  the  President  of 
the  Constitutional  Convention  at  Philadel- 
phia, in  order  to  find  the  right  place  to 


46  THE  GREAT  NEWS 

"erect  a  standard  to  which  the  wise  and  the 
honest  may  repair."  The  standard  of  po- 
litical regeneration  should  be  set  up  in  the 
open  market-place,  at  the  emotional  centre 
of  the  business  world. 

If  the  reformers — the  radicals  and  social- 
ists— have  turned  their  backs  upon  the  actual 
organization  of  working  forces,  and  have 
set  their  hopes  on  an  increase  of  the  ballot- 
ing practice,  that  is  a  regrettable  but  not  an 
incurable  mistake.  Socialism  as  a  political 
philosophy  deserves  respect,  because  of  its 
profound  diagnosis  of  a  social  disease — the 
disease  of  a  non-political  and  socially  irre- 
sponsible capitalism.  But  the  socialists 
have  not  exhibited  any  noteworthy  skill  in 
therapeutics.  Their  proposal,  reduced  to 
its  kernel,  is  to  substitute  election  by  major- 
ity for  the  present  practice  of  contractual 
selection — in  the  control  of  the  staple  in- 
dustries. They  say  the  chief  powers  of  in- 
dustry and  commerce  should  be  taken  out  of 
the  hands  of  men  who  have  achieved  power 


GOVERNMENT   BY   PROXY     47 

by  process  of  free  contract,  and  put  into  the 
hands  of  elected  persons. 

The  talk  of  common  ownership  is  beside 
the  point.  For  the  essence  of  ownership  is 
control,  and  the  real  question  is :  Who  shall 
manage  the  great  concerns,  and  by  what 
right  and  title?  The  socialistic  answer  to 
this  question  cannot  be  successfully  im- 
pugned from  the  point  of  view  of  old-fash- 
ioned politics.  For  socialism  is  simply  old- 
fashioned  politics  carried  to  a  logical  con- 
clusion. If  elected  persons  are  competent 
to  control  the  controllers  of  the  great  indus- 
try, there  is  no  reason  why  they  should  not 
go  a  step  further  and  dispense  with  inter- 
mediaries. 

But  the  socialists'  plan  is  impossible,  just 
as  the  plan  of  the  orthodox  politicians  is  im- 
possible. Both  appear  reasonable  to  men  of 
the  backward  look,  because  the  principle 
involved  has  actually  been  applied,  after  a 
fashion,  for  a  long  time.  It  had  a  look  of 
practicality,  before  the  business  system  de- 
veloped its  essential  character  and  strength. 


48  THE  GREAT  NEWS 

Socialism,  like  our  traditional  liberalism, 
falsely  supposes  that  justice  and  truth  can 
be  institutionalized  apart  from  the  working 
world — that  the  working  world  can  be,  and 
ought  to  be,  subjected  to  other  and  higher 
authorities  than  those  that  are  evolved  by 
the  working  process  itself. 

This  illusion  was  specious  and  believable 
— until  industry  and  commerce  achieved  the 
beginnings  of  an  autonomous  and  self-sub- 
sistent  system.  It  may  still  be  specious,  but 
it  is  no  longer  believable  by  understanding 
men  who  have  felt  the  pulse  and  passion  of 
great  business. 

All  imputed  and  delegated  authorities 
have  been  smitten  with  death  in  the  Great 
Catastrophe — which  is  also  the  Great  Awak- 
ening. The  sovereignty  of  the  world  is 
passing  into  the  hands  of  autochthonous 
men — those  who  derive  their  strength  di- 
rectly from  the  earth  and  the  elements.  It 
will  pass  to  the  creators — or  else,  for  a  while, 
to  the  destroyers. 

The  race  is  being  fused  in  a  great  heat. 


GOVERNMENT   BY   PROXY     49 

There  is  nothing  that  may  not  perish,  except 
the  right  to  sow  and  reap,  to  build  up  the 
broken  cities  and  restore  the  beauty  of  the 
world.  Peace — when  it  comes — will  be  es- 
tablished upon  that  right. 

The  war  will  go  on — perhaps  with  inter- 
missions— until  that  kind  of  peace  becomes 
possible.  There  is  nothing  else  to  stop  its 
going  on.  There  is  no  other  principle  of 
reconciliation. 

A  man's  right  to  have  authority  in  pro- 
portion to  the  scope  of  his  creative  power, 
is  the  first  constitutional  principle  of  busi- 
ness. This  principle  has  been  sophisticated 
and  subverted,  but  it  has  never  been  lost 
sight  of  by  business  men.  Even  when  they 
are  themselves  tortuous  and  sinister,  they 
pay  homage  to  it  by  their  hypocrisies. 

The  business  system  was  corrupted  in 
every  land  by  its  propinquity  to  an  old  and 
decrepit  politics.  Business  was  so  strong, 
and  politics  so  weak !  It  was  so  much  easier 
to  get  rich  by  laws  in  a  book,  than  by  the 


50  THE  GREAT  NEWS 

out-door  laws  of  art  and  science.  Such  rich- 
ness of  loot !  Municipalities,  states,  empires 
— with  nobody  but  proxies  to  watch  over 
them.  So  true  was  it,  as  Mr.  Emile  Faguet 
said,  that  in  every  democratic  country  the 
political  offices  were  drowsy  with  "the  cult 
of  incompetence,"  the  air  shuddered  with  a 
"horror  of  responsibility."  How  was  it  pos- 
sible for  the  crude,  young  giant  of  Big  Busi- 
ness to  turn  away  from  such  temptation? 
He  did  not  turn  away.  He  made  tools  and 
weapons  of  the  cities,  states,  and  empires. 

But  now  the  day  of  reckoning  has  come. 
The  international  organization  of  finance 
and  industry — which  reached  out  for  the 
sceptre  of  world-power,  but  took  no  thought 
for  the  governing  of  itself — has  raised  up 
its  Nemesis,  the  Military  State. 

There  is  no  power  that  can  discipline  or 
subjugate  a  business  system  that  refuses  to 
govern  itself — except  the  power  that  was 
invoked  by  Bismarck.  In  mastering  its 
own  bad  business  system,  and  schooling  it 
to  be  somewhat  social  and  civil,  the  German 


GOVERNMENT    BY   PROXY     51 

Empire  overbalanced  the  whole  world-fam- 
ily of  liberal  states  enfeebled  by  plutocracy. 
It  laid  upon  them  all  the  necessity  of  either 
democratizing  their  business  through  and 
through,  or  else  of  Prussianizing  themselves, 
if  they  would  compete,  in  commerce  or  war, 
with  Germany.  Britain,  France,  Italy  and 
all  the  rest  hammering  upon  every  frontier 
cannot  break  the  power  of  Germany,  until 
after  they  have  made  their  own  "invisible 
governments"  visible. 

Plutocracy  runs  swiftly  to  anarchy  and  to 
an  incredible  economic  feebleness.  It  is  bet- 
ter to  revert  to  feudalism.  For  the  feudal 
principle  is  at  bottom  half -democratic. 

A  military  state  that  has  feudalized  its 
business  system  is  now  shown — beyond  all 
gainsaying — to  be  incomparably  stronger 
than  any  government  by  the  proxies  of 
stock-  and  bond-holders. 

The  United  States  has  the  benefit  of  a 
stay  of  judgment — a  little  respite  and  a 
chance  to  think — because  of  the  cool,  three 
thousand  miles  of  water. 


52  THE  GREAT  NEWS 

But  the  United  States  must  choose — it 
would  be  better  to  decide  quickly — whether 
it  will  Prussianize  itself,  as  England  and 
France  are  doing,  or  will  rectify  its  business 
system  and  develop  the  unconquerable 
power  of  a  real  democracy. 

This  large  issue  is  not  yet  settled. 

But  one  thing  is  settled,  namely  this — we 
cannot  remain  as  we  are.  Government  by 
subterfuge  and  indirection  cannot  possibly 
stand  the  strain  of  such  times  as  these. 


Ill 

AUTHORITY  OF  THE  ENGINEERS 

HERE  seems  to  be  such  a  thing  as  a 
A  voice  of  the  times;  an  articulate  sum- 
mons is  addressed  to  those  who  have  ears  of 
a  certain  sensitiveness.  The  voice  has  a  tone 
of  scorn  and  menace  for  those  who  depend 
for  their  happiness  upon  the  restoration  of 
the  state  of  affairs  that  preceded  the  out- 
break of  the  war.  (For  what  man  with  an 
understanding  that  is  not  dull  and  thick  can 
suppose  that  that  state  will  ever  return?) 
But  the  meaning  is  full  of  refreshment  and 
good  cheer  for  people  whose  fortune  does 
not  depend  upon  a  frame  of  words  or  the 
figures  in  a  book.  The  summons  of  the 
voice  of  the  times  goes  forth  to  men  of  ca- 
pacity and  creative  power — apprising  them 
that  this  is  their  day. 

In  Western   Europe  and  America   we 
n 


54  THE  GREAT  NEWS 

have  lived  through  an  age  of  misunderstood 
democracy — one  of  the  sorriest  ages,  for  men 
of  high  spirit,  an  age  in  which  there  was  no 
authority  except  the  kind  conjured  up  by 
mere  numerousness  and  imputed  to  pliancy 
and  passivity. 

It  is  impossible  that  anything  memorable 
and  beautiful  should  be  accomplished  by  a 
society  devoid  of  centres  of  authority. 
Beautiful  things  will  indeed  be  done  to  the 
end  of  the  world,  wherever  there  are  brave 
men  and  sweet  women.  But  these  cannot 
become  memorable,  cannot  be  accumulated 
and  woven  into  a  tradition,  if  the  social  or- 
ganization has  no  agency  to  discriminate  as 
to  the  relative  value  of  things. 

There  is  no  warrant  in  biologic  science  for 
the  assumption  that  the  human  race — or  any 
race — tends  to  improve  by  mere  stress  of 
natural  selection,  without  help  from  a  cor- 
relating intelligence  and  will.  Yet  it  is  upon 
that  kind  of  an  assumption  that  the  politics 
of  the  nineteenth  century  was  built.  It  was 
supposed  that  truth  could  be  elicited  through 


AUTHORITY  OF  ENGINEERS     55 

the  free  interplay  of  comparative  falsehoods 
and  that  science  and  the  arts  could  be  ad- 
vanced by  a  social  system  that  grew  steadily 
poorer  in  passion  for  reality  as  it  became 
more  and  more  engrossed  in  the  attack  and 
defence  of  the  struggle  for  property  rights. 

Shall  we  not  set  it  down  that  without  au- 
thority there  can  be  no  democracy?  If  there 
is  a  Devil  that  loves  and  fosters  slavery,  he 
must  have  been  the  inventor  of  the  doctrine 
that  authority  is  accursed,  and  that  no  man 
ought  to  be  permitted  to  achieve  it,  whether 
by  demonstration  of  love,  of  knowledge  or 
of  creative  power — the  doctrine  that  all  men 
should  be  held  under  a  level  and  undis- 
tinguished suspicion,  that  reality  is  unat- 
tainable, that  everything  is  matter  of  opin- 
ion, that  one  man's  opinion  is  as  good  as 
another's  and  that  the  majority  should  rule. 
If  the  genius  of  the  clanking  chain  and  slant- 
ing brow  could  but  rivet  this  formula  for 
good  and  all  upon  the  minds  of  men,  he 
would  have  performed  his  perfect  work  and 


56  THE  GREAT  NEWS 

there  would  never  again  be  any  danger  that 
the  masses  would  escape  from  established 
stupidity  and  brutal  toil.  For  with  univer- 
sal suspicion  and  the  abounding  vanity  of 
personal  opinion,  the  most  enormous  devil- 
tries are  easy  of  accomplishment.  A  people 
possessed  by  such  influences  readily  yields  it- 
self to  a  sentiment  of  fatalism,  feeling  that 
the  powers  actually  in  possession  are  con- 
secrated by  their  own  force.  And  where 
blind  force  falls  short,  the  spell  is  readily 
completed  by  the  arts  of  sophistry  and  the 
charm  of  fine  words. 

The  nineteenth  century  elaborated  the 
merely  negative  aspects  of  democracy.  And 
those  negatives,  taken  by  themselves — in  ab- 
straction from  the  affirmations  that  properly 
go  with  them — are  not  practical  and  are  not 
true.  They  have  atomized  the  Western  na- 
tions and  gone  far  toward  the  complete  dis- 
solution of  society. 

It  appears  now  that  the  rule  of  the  ma- 
jority is  not  a  true  principle,  but  only  a 


AUTHORITY  OF  ENGINEERS     57, 

means  of  approach  to  a  true  principle. 
Rightly  understood  this  appeal  from  the  old 
feudal  powers  to  the  people,  is  an  appeal 
from  a  transcendent  to  an  immanent  God. 
It  declares  that  the  Kingdom  of  Heaven  is 
not  going  to  be  imposed  upon  mankind  by 
a  superhuman  power,  but  is  a  matter  of  per- 
sonal initiative  and  human  responsibility.  It 
declares  that  God  has  appointed  no  agents 
with  power  of  attorney,  that  creative  au- 
thority is  latent  in  human  nature  and  that 
the  honor  and  dignity  of  it  become  actual 
and  operative  in  all  who  are  in  any  degree 
masterful  over  the  fatalities  of  nature  or 
who  appreciate  those  who  are. 

The  sovereignty  of  the  people  turns  out 
to  be  mere  cant  and  a  fraud,  unless  a  stand- 
ard of  valor  and  worth  is  somehow  visibly 
set  up  by  those  who  do  not  wait  to  be  told 
what  to  do — either  by  officials  or  by  the 
crowd. 

Universal  suffrage  has  played  an  impor- 
tant historic  role  as  a  device  for  the  regis- 


tration  of  an  "Everlasting  Nay"  upon  im- 
possible pre.tenders  and  upon  governments 
by  grasping  and  exclusion.  But  any  one 
may  observe,  who  cares  to  take  the  trouble, 
that  the  electoral  suffrage  is  not  a  practicable 
means  of  projecting  social  enterprises  and 
improvements.  It  is  only  a  means  of  certi- 
ficating public  consent  or  dissent.  The  real 
control  of  social  forces  is  in  the  hands  of 
those  who  have  the  initiative  of  measures  and 
projects.  And  nobody  has  invented  a  way 
of  getting  a  real  initiative  out  of  a  pleb- 
iscite. 

The  political  initiative  in  the  United 
States  lies  now  in  the  local  groups  who 
"know  exactly  what  they  want"  and  who  co- 
here because  they  want  similar  things. 
These  groups  of  privilege  seekers  are  vexed 
and  sometimes  baffled,  though  never  really 
balked,  by  groups  of  reformers  who  make 
small  and  temporary  emotional  investments 
in  public  affairs.  These  distract  each  other 
by  the  natural  diversity  and  discursiveness 
of  idealistic  thought.  And  at  best,  their 


AUTHORITY  OF  ENGINEERS     59 

purpose  is  attenuated,  in  direct  proportion 
to  its  popular  extension. 

Thus  we  may  say  that  democracy  is  not 
the  rule  of  the  majority,  but  of  the  wilful 
servants  of  all.  The  masters  of  the  earth, 
the  air  and  the  sea  are  to  be  the  governors — 
with  the  consent  of  the  governed.  The 
servants  are  enterprising,  insistent,  indis- 
suadable,  irresistible.  It  is  impossible  for 
the  majority  to  withhold  its  consent  from  a 
rule  that  really  serves. 

The  authority  of  the  democratic  order  re- 
sides in  those  who  have  a  passion  for  reality, 
who  readily  discriminate  between  words 
and  things,  between  utilities  and  phrases — 
and  who  are  resolute!  to  deliver  the  real 
goods. 

People  of  this  character  are  capable  of 
forming  an  indissoluble  union.  To  say  that 
their  union  will  last  for  a  day  or  a  year  and 
then  dissolve,  as  unions  of  political  ideo- 
logues and  rhetoricians  dissolve,  is  to  miss 
the  point  of  the  political  programme  of 


60  THE  GREAT  NEWS 

Western  civilization — the  point  of  Chris- 
tianity and  of  democracy.  That  point  is 
that  intellectualism  is  in  its  very  nature  dis- 
solvent and  divisive,  but  that  men  can  get 
together  and  stay  together  by  making  the 
mastery  of  the  difficulties  of  existence  a  di- 
rect object  of  devotion.  People  who  pay 
close  attention  to  the  concrete  realities  of  the 
universe  are  bound  to  hold  together — be- 
cause the  universe  does.  This  is  the  mean- 
ing of  the  sacrament  of  bread  and  wine.  It 
is  the  political  principle  that  separates  the 
Occident  from  the  Orient.  It  is  the  core  of 
democracy. 

The  United  States  is  entirely  fit  and  pre- 
pared for  this  discovery.  It  has  been  ready 
for  a  long  time. 

But  alas!  the  imperious  servants — the 
Masters  of  Arts  who  will  not  suffer  their 
office  to  be  thwarted  or  despised,  who  will 
not  give  way  to  talkers  and  bunglers — have 
not  yet  appeared. 

The  capable  men  of  the  United  States 


AUTHORITY  OF  ENGINEERS    61 

have  hitherto  lacked  the  moral  courage 
to  challenge  the  superstition  of  mass-rule. 
Probably  their  lack  of  courage  to  confront 
a  social  falsehood  has  been  due  to  a  con- 
sciousness that  their  aims  were  not  broadly 
social.  Probably  they  had  reserves  of  pri- 
vate purpose  that  would  not  bear  exposure. 
This  is  likely  on  grounds  of  historical  psy- 
chology. For  men  of  capacity  and  under- 
standing have  never  hesitated  to  challenge 
popular  superstitions,  unless  they  were 
themselves  using  the  superstitions  to  cloak 
unpublic  aims,  aims  that  could  not  be  gained 
in  those  ways  of  openness  and  the  strong 
hand  which  are  so  fair  and  pleasant  for 
brave  men. 

But  whatever  may  have  been  the  subter- 
fuges to  which  Americans  of  high  intelli- 
gence have  resorted  in  times  of  social  tran- 
quillity, it  should  be  evident  to  such  men  that 
they  have  now  fallen  upon  a  perilous  time 
in  which  essential  issues  are  to  be  tried  out, 
and  in  which  superstitions  can  serve  no  pru- 
dential purpose.  In  such  times  intelligent 


62  THE  GREAT  NEWS 

men  are  shocked  into  entire  public-minded- 
ness — as  may  be  currently  observed  in  Ger- 
many, France  and  England — since  only 
superstitious  people  have  any  real  belief  in 
the  security  of  fictions  or  the  permanence  of 
privileges  that  are  not  backed  by  personal 
force. 

Thus  it  may  now  be  expected  that  men  of 
sense  in  this  country  will  respond  to  the 
summons  uttered  so  loudly  in  the  clangor 
of  great  events — and  will  set  up  the  stand- 
ard of  that  authority  which  alone  can  give 
us  collectedness  and  strength. 

A  famous  geographer  in  Edinburgh  lays 
his  hand  upon  a  globe  and  remarks  to  the 
by-standers  that  the  deserts  have  gained 
steadily  upon  the  arable  land  throughout  the 
whole  period  of  recorded  history,  so  that  the 
planet  is  on  the  whole  less  habitable  than  it 
was  five  thousand  years  ago.  That  remark 
is  a  sufficient  indictment  of  our  politics.  It 
calls  attention  to  the  all-important  fact  that 
states  have  been  built  and  operated  to  pro- 


AUTHORITY  OF  ENGINEERS    63 

tect  the  wealth  of  groups  of  men  against  the 
cupidity  of  other  groups,  but  never  for  the 
dead-set  purpose  of  creating  wealth.  There 
have  indeed  been  times  and  occasions  in 
which  place  and  promotion  have  been  freely 
conceded  to  men  strong  in  the  organization 
of  the  earth-struggle  and  in  the  develop- 
ment of  the  nerves  and  sinews  of  peace  and 
war.  Those  have  been  illustrious  times. 
But  for  the  most  part  the  places  and  pro- 
motions have  been  accorded  to  skills  and 
competencies  of  another  kind.  The  grand 
artists  and  engineers  have  been  subjected 
to  the  rule  of  feeble  and  facile  men  whose 
only  strength  was  in  the  strong  delusions  of 
the  people. 

America  exists  to  change  all  that.  It  is 
our  part  and  lot  to  contribute  to  universal 
civilization  a  principle  of  authority  so  rooted 
in  the  conditions  of  planetary  existence  that 
its  empire  will  have  a  chance  to  last  while 
the  race  and  the  planet  last. 

There  are  evident  signs  abroad  that  the 


64  THE  GREAT  NEWS 

categories  of  the  old  politics  are  now  quite 
definitely  exhausted,  and  that  there  can  be 
no  more  peace  on  earth  until  a  valid  prin- 
ciple of  authority  shall  be  somewhere  un- 
shakably  established.  This  is  our  obvious 
calling  and  election.  It  is  the  "genius  of 
these  states"  to  establish  the  government  of 
those  who  insist  that  the  deserts  must  re- 
cede. 

This  principle  of  authority  is  valid  with 
an  unconquerable  strength,  because  it  per- 
mits no  sophistication  of  the  original 
sources  of  human  power.  It  attributes 
power  only  to  those  who  actually  have 
it — into  whose  hands  and  brains  and 
hearts  the  dynamic  of  the  elemental  world 
has  entered.  Farmers  that  manage  the 
moods  of  nature,  engineers  that  make  ma- 
chines obey,  painters  and  carvers  of  forms 
that  refresh  and  hearten  men,  judges  and 
administrators  that  make  precedents  in  the 
interest  of  the  practical  arts — these  are  the 
depositaries  of  an  imperial  authority  that 
can  offer  the  highest  inducements  to  con- 


AUTHORITY  OF  ENGINEERS    65 

ciliation — or  mobilize  the  heaviest  battalions 
in  case  of  need. 

The  American  Commonwealth  can  be 
made  powerful  and  prosperous  by  substi- 
tuting for  the  existing  partisan  or  bi-parti- 
san  "Machine"  in  local  communities,  a  po- 
litical institution  devoted  to  really  practical 
politics,  namely  to  an  economy  of  the  re- 
sources of  nature  and  the  creative  abilities 
of  men,  with  a  view  to  increasing  the  pur- 
chasing-power of  everybody's  day's  work. 

This  aim  is  of  course  the  true  purpose  of 
politics  and  of  political  economy.  To  bet- 
ter the  earth-hold  of  human  beings,  to  make 
goods  cheap  and  men  dear,  to  release  and 
intensify  productive  competition,  by  setting 
up  an  authority  of  appreciation  and  de- 
mand ;  and  by  that  same  means  to  abate  and 
abolish  the  wasteful  and  destructive  com- 
petition for  market-control — this  is  the  pro- 
gramme and  definition  of  real  politics. 

So  long  as  American  communities  are  flat 
and  formless  under  the  hand  of  officialdom 


66  THE  GREAT  NEWS 

or  are  governed  from  social  centres  that  are 
secretly  devoted  to  group-interests,  they  can 
be  neither  powerful  nor  prosperous.  Free 
government  is  government  from  social  cen- 
tres whose  authority  is  intrinsic,  and  unoffi- 
cial— depending,  for  its  force  and  sanction, 
upon  the  consentaneousness  of  sensible  men. 

The  world-changing  mission  of  the  spirit 
and  genius  of  the  United  States  has  been 
generally  obscured  and  lost  sight  of  since 
the  close  of  the  nineteenth  century.  For 
three  or  four  generations  we  had  cherished 
the  tradition — though  indeed  we  had  made 
no  clear  demonstration  of  its  meaning — that 
the  political  and  social  order  in  this  country 
was  somehow  fundamentally  different  from 
that  of  old-world  states.  America  stood 
forth  unique — great  with  a  spiritual  portent 
that  was  incomparable.  We  all  thought 
that.  It  was  taught  in  the  schools,  implied 
in  all  our  literature  and  breathed  in  the 
common  air. 

Since  1898  this  sense  of  national  unique- 


ness  has  been  suspended.  For  the  moment 
we  have  been  content  to  think  of  ourselves 
as  just  one  of  "the  great  powers" — which 
is  of  course  a  claim  far  lower  than  that  made 
by  our  fathers — amounting  in  fact  to  a  tem- 
porary abandonment  of  their  purpose  and 
a  threatened  apostasy  from  their  faith. 

It  was  perhaps  necessary  that  we  should 
stand  aside  from  our  own  tradition  for  a 
time — in  order  to  get  an  objective  view  of 
it  and  a  fresh  evaluation  of  its  meaning.  But 
if  we  cannot  now  recover  the  thread  of  our 
history,  if  democracy  has  no  deeper  and  more 
recuperative  intent  here  than  is  apparent  in 
France  or  Great  Britain,  we  have  wasted 
much  poetry  and  prophecy  on  a  very  small 
thing. 

It  is  herein  submitted  that  American  de- 
mocracy really  is  a  portentous  and  world- 
transforming  principle — and  that  the  time 
has  come  to  give  that  principle  a  sharp  defi- 
nition and  demonstration. 

Democracy  in  Europe  makes  no  attempt 


68  THE  GREAT  NEWS 

to  establish  the  seat  of  authority  and  social 
control  in  a  free  association  of  citizens.  It 
leaves  the  sovereignty  where  the  Roman 
Empire  lodged  it — in  the  hands  of  oath- 
hound  and  specially  sanctified  officials. 
European  democracy  is  stark  officialdom, 
excited  and  distracted  by  demogogues,  and 
by  periodic  pollings  and  a  plutocratic  press. 
There  is  hardly  such  a  thing  in  Europe — 
(outside  the  universities  and  certain  broad- 
based  economic  institutions  in  Germany)  — 
as  an  organized  unofficial  political  intelli- 
gence. 

Now  without  free  and  permanent  politi- 
cal associations  armed  with  the  authority  of 
science  and  the  humanities,  the  sovereignty 
of  the  people  is  a  merely  romantic  and 
mythical  idea.  The  sovereignty  must  con- 
tinue to  rest  in  an  official  hierarchy,  sunk  in 
irrational  routine,  and  either  cowed  and 
stupefied  by  the  pressure  of  private  inter- 
ests or  driven  to  sudden  mad  adventures  by 
the  repressed  and  morbid  idealism  of  the 
crowd — until  the  sovereignty  of  the  people 


AUTHORITY  OF  ENGINEERS    69 

shall  achieve  an  institutional  embodiment  in 
local  communities.  The  democracies  will 
never  escape  from  their  feebleness,  pettiness 
and  provincialism,  their  moral  cowardice 
and  cruelty  to  the  poor,  their  sack  of  the 
stores  of  nature  and  their  boundless  incom- 
petence and  inefficiency — they  will  never 
surpass  the  moral  spaciousness  and  material 
splendor  of  the  administration  of  great 
kings — until  the  kingliness  that  serves  with- 
out a  crown  has  wearied  of  the  confusion, 
and  has  shouldered  its  way  to  its  right 
place. 

The  true  analogies  of  social  catastrophe 
and  transformation  are  not  to  be  found  in 
the  slow  motions  of  geologic  time  or  in  the 
evolution  of  plants  and  animals,  but  rather 
in  the  swift  crystallizations  and  precipita- 
tions of  the  chemist's  laboratory.  There  is 
the  jar  of  a  beaker — and  you  have  a  new 
substance. 

Thus  in  the  extraordinary  stress  of  these 
times  an  authentic  and  capable  democratic 


70  THE  GREAT  NEWS 

politics  will  be  produced  in  a  single  year — 
or  else  the  climactic  occasion  will  pass,  and 
the  thing  will  wait  for  another  age.  Yet  the 
great  social  changes  have  their  foreshadow- 
ings.  And  the  American  people  would 
surely  be  incapable  of  critical  effort  in  this 
matter,  if  it  had  not  already  made  success- 
ful experiments  toward  the  establishment  of 
free  and  unofficial  centres  of  social  author- 
ity. The  public  school  is  of  course  the  chief 
demonstration.  Woodrow  Wilson — who  per- 
haps feels  more  sensitively  than  any  other 
conspicuous  and  expressive  man  what  lies 
below  the  surface  of  events  in  American  life 
— has  shown  through  his  whole  career  a  sense 
of  the  fact  that  democracy  does  not  polarize 
at  the  polls  but  in  the  university  and  the 
public  school.  His  fight  at  Princeton 
against  academic  plutocracy  and  class-cul- 
ture and  his  original  and  venturesome  sup- 
port of  the  quasi-political  phase  of  the  "So- 
cial Centre  movement" — are  characteristic 
incidents  of  that  career. 

As  President  of  the  United  States  Mr. 


AUTHORITY  OF  ENGINEERS    71 

Wilson  has  led  in  other  notable  adventures 
toward  the  free  organization  of  public  au- 
thorities on  a  basis  of  science  and  social  ser- 
vice. The  Federal  Reserve  Bank  System  is 
characterized  by  its  effort  to  effect  a  free 
co-ordination  of  financial  powers  on  a  basis 
of  intrinsic  law,  rather  than  by  its  incidental 
relation  to  Washington  officials.  In  his  Mo- 
bile speech  and  in  his  summary  action  on 
the  proposed  Six-Power  loan  to  China,  Mr. 
Wilson  marked  his  clear  judgment  against 
the  state-parasitism  of  big  business,  his  per- 
ception of  the  truth  that  the  organization  of 
working  forces  can  become  the  sovereign 
power  of  the  modern  world  only  after  it  has 
ceased  to  depend  upon  official  patronage. 
That,  too,  is  the  moral  of  the  long  patience 
toward  Mexico.  In  the  Pan-American  Fi- 
nancial and  Commercial  Conference  pre- 
sided over  by  Mr.  McAdoo,  and  in  the  Joint 
High  Commission  instituted  to  continue  its 
work,  emphasis  is  given  to  the  idea  that  a 
continental  system  of  industry  can  be  made 
to  rest  on  the  bare  ground  of  science  and 


72  THE  GREAT  NEWS 

humanity.  And  in  the  administration  of  the 
Department  of  Commerce  there  has  been  an 
appeal  to  the  business  communities  to  de- 
velop new  powers  of  self-sufficiency  and 
self-government ;  and  missionaries  have  been 
sent  abroad  through  the  land  to  suggest 
how  that  thing  may  be  done. 

Perhaps  no  single  institution  created  by 
the  spontaneous  action  of  men  of  affairs  is 
more  suggestive  of  the  nature  of  govern- 
ment from  authoritative  but  non-official  so- 
cial centres,  than  is  the  Associated  Press. 
Observe  that  this  institution  is  a  monopoly- 
in-the-nature-of -things.  Its  monopoly  de- 
pends upon  no  charter  or  franchise  and  no 
special  claim  upon  the  materials  and  forces 
of  nature.  It  depends  solely  upon  the  fact 
that  modern  society  needs  a  self-consistent 
organization  for  the  collection,  evaluation 
and  distribution  of  news ;  and  that  one  such 
organization  is  better  than  many,  just  as 
one  nervous  system  in  a  human  body  is  bet- 
ter than  two. 


AUTHORITY  OF  ENGINEERS    73 

The  Associated  Press  reflects  the  prepos- 
sessions and  prejudices  of  the  prosperous 
class  but  is  morally  ingenuous  and  incor- 
ruptible. It  cannot  be  superseded  in  its 
particular  field  by  any  news  organization 
of  similar  character,  in  spite  of  its  vexatious 
exclusiveness  in  the  sale  of  its  service.  But 
it  can  be  superseded  or  compulsorily  trans- 
formed, and  will  be — when  the  American 
people  shall  come  to  understand  that  the 
news  service  is  necessarily  a  judicial  office 
— just  as  the  credit  service  is  executive,  and 
the  educational  system  legislative;  and  that 
these  three  are  the  primary  and  concentric 
political  powers  in  a  real  democracy. 

The  organization  known  as  the  United 
States  Chamber  of  Commerce  is,  like  the 
Associated  Press,  an  adventure  toward  the 
evolution  of  a  democratic  social  authority. 
Both  are  merely  tentative  and  necessarily 
impermanent  in  their  present  form.  Both 
stand  apart  from  the  private  money-mak- 
ing process,  and  undertake  to  represent  an 


74  THE  GREAT  NEWS 

interest  that  is  impersonal  and  social;  but 
they  can  succeed  in  this  purpose  only  im- 
perfectly, because  of  the  fact  that  their  con- 
stituent institutions — local  chambers  of 
commerce  and  newspaper-publishing  com- 
panies throughout  the  country — are  gener- 
ally devoted  to  the  interests  of  the  "busi- 
ness" community,  and  not  to  the  interests 
of  society  as  a  whole. 

There  is  an  economic  absurdity  in  the 
constitution  of  all  our  municipal  chambers 
of  commerce  or  boards  of  trade.  In  the 
free  cities  of  the  Middle  Ages  the  trades 
guilds  and  merchants'  guilds  were  usually 
found  in  close  correlation;  but  it  is  difficult 
to  find  in  the  United  States  a  chamber  of 
commerce  that  works  in  harmony  with  the 
local  labor-council  or  acknowledges  in  any 
settled  and  organic  way  a  community  of  in- 
terest between  the  two.  It  is  indeed  loudly 
proclaimed  that  the  interests  of  labor  and 
capital  are  identical;  but  no  impressive  ef- 
forts are  made  to  prove  it,  in  the  only  way 
that  it  can  be  proved ;  namely,  by  serious  en- 


AUTHORITY  OF  ENGINEERS    75 

deavor  on  the  part  of  a  chamber  of  com- 
merce to  raise  the  minimum  standard  of  liv- 
ing. In  every  American  city  the  general 
economic  interest  of  the  municipality  goes 
unchampioned — save  by  the  occasional  and 
wistful  idealism  of  individuals.  There  is  no 
organization  to  stand  up  steadily  for  the 
public.  The  industrial  and  commercial 
plant  of  the  community — its  ensemble  of 
factories,  stores  and  so  on — has  no  institu- 
tional guardianship.  There  is  no  social 
agency  bent  upon  making  the  most  of  the 
material  apparatus  by  which  the  life  of  the 
community  is  sustained.  On  the  contrary 
that  apparatus  is  subjected  to  a  persistent, 
obstructive  and  ruinous  sabotage,  by  organ- 
ized capital  on  one  hand  and  by  organized 
labor  on  the  other.  Organized  capital  re- 
fuses to  take  any  direct  interest  in  the  pro- 
ductive process  by  which  the  community 
lives;  and  organized  labor  makes  the  same 
refusal.  Capital  says,  The  wheels  of  indus- 
try shall  turn  as  fast  and  as  long  as  is  good 
for  investors ;  they  shall  not  turn  at  all,  when 


76  THE  GREAT  NEWS 

their  not-turning  is  good  for  investors.    The 
attitude  of  Labor  is  precisely  similar. 

It  is  difficult  to  respect  the  intelligence  of 
those  who  have  given  attention  to  these  mat- 
ters and  who  do  not  perceive  the  sardonic 
humor  and  monstrosity  of  the  situation.  To 
men  of  normal  understanding  it  should  be 
plain  that  this  sort  of  thing  cannot  go  on  in- 
definitely. The  wheels  of  industry  slow 
down  and  deadlock  for  a  reason  that  is  per- 
fectly obvious.  The  reason  is  that  nobody 
takes  any  direct  interest  in  keeping  them 
going.  There  is  an  immense  amount  of  so- 
cial will-power  exercised  in  the  double  sa- 
botage that  has  been  described ;  but  there  is 
absolutely  no  social  will-power  directed  to 
the  up-keep  and  improvement  of  the  appa- 
ratus of  civilization. 

The  need  of  a  new  kind  of  chamber  of 
commerce  to  take  a  direct  interest  in  the 
business  by  which  modern  communities  live, 
is  such  a  staring  truth  that  expatiation  upon 
it  seems  insulting — a  kind  of  mental  alms- 


AUTHORITY  OF  ENGINEERS    77 

giving,  upon  which  one  should  not  venture 
without  express  and  personal  solicitation. 

The  United  States  is  full  of  that  fear  of 
the  crowd  which  Lord  Bryce  described  with 
such  delicacy  and  discretion  in  his  "Ameri- 
can Commonwealth."  One  must  look  far  in 
this  country  to  find  a  politician,  clergyman 
or  newspaper-man  who  will  make  public 
acknowledgment  of  his  doubts  as  to  the  po- 
litical wisdom  of  the  majority,  or  the  ad- 
vantage of  consulting  everybody  before  any- 
thing political  shall  be  done.  This  fear  or 
blind  reverence  for  the  vaticination  of  the 
multitude  has  a  half -justification  in  the  his- 
torical discovery  of  the  futility  of  the  culti- 
vated class.  But  the  fact  is,  on  the  other 
hand,  as  George  Sand  remarked,  that  "there 
is  nothing  so  undemocratic  as  the  mass  of 
the  people."  Therefore  if  genuine  democ- 
racy is  ever  to  get  forward  in  the  world  it 
will  be  by  coup  de  main  and  conquest  on  the 
part  of  those  who  dare  go  up  against  crowds 
in  the  cause  of  common  sense. 


78  THE  GREAT  NEWS 

The  crowds  are  unanimous  for  common 
sense — the  year  after  the  battle.  They 
never  fail  to  build  the  sepulchres  of  the 
prophets  they  have  slain.  The  "plain  peo- 
ple" know  a  good  thing  when  they  see  it, 
but  they  do  not  see  it  until  after  it  has  been 
produced  without  their  consent.  To  say 
this  is  no  disparagement  of  our  common  hu- 
mankind. For  the  deeper  truth  is  that  en- 
terprise, or  will-action,  is  in  its  very  nature 
personal ;  so  that  any  mass  of  men — even  if 
all  were  of  equal  capacity — would  have  to 
rely  upon  individuals  for  every  motion  of 
social  progress. 

In  our  actual  society,  with  its  immense 
disparities  of  mental  strength  and  moral 
courage,  it  is  impossible  to  establish  the  au- 
thority of  democracy  otherwise  than  by  the 
direct  action  of  small  local  minorities  of  im- 
patient men. 

The  majorities  will  see  that  this  authority 
is  a  good  thing — after  it  has  come  into  be- 
nignant and  formidable  existence.  And 


AUTHORITY  OF  ENGINEERS    79 

they  will  cheerfully  turn  in  to  support  it 
within  twelve  months  from  the  beginning  of 
its  effectual  action. 


IV 

MODERNIZING  AMERICAN  POLITICS 

MR.  HENRY  M.  ALDEN,  the  ven- 
erable editor  of  Harper's  Magazine 
— who  is  a  profound  and  acute  observer — 
remarks  in  his  book  on  "The  New  Litera- 
ture," that  within  the  brief  period  since  the 
sixth  decade  of  the  nineteenth  century  there 
has  been  "a  revolution  in  human  thought 
and  feeling,  a  changed  attitude  toward  life 
and  the  world."  He  says  that  the  political 
historian  dates  modern  history  from  the  rise 
of  the  middle  classes  in  the  fifteenth  century ; 
but  that  the  historian  of  the  human  mind  and 
soul  must  date  the  origin  of  what  is  really 
modern  from  some  point  a  little  later  than 
1860 — "when  the  human  reason  and  imag- 
ination, following  the  course  long  before 
taken  by  science,  broke  with  all  forms  of 
scholasticism  of  traditional  authority  and  of 

80 


MODERNIZING  POLITICS      81 

merely  notional  thinking.  .  .  .  The  whole 
psychical  atmosphere  was  cleared  of  ab- 
stractions that  had  inhabited  and  domi- 
nated it  for  centuries — the  Powers  of  the 
Air." 

Thus,  according  to  Mr.  Alden's  general 
account  of  the  matter,  one  may  say  that  po- 
litical writers  are  still  talking  in  terms  that 
suggest  the  mental  climate  of  the  fifteenth 
century,  while  the  man  in  the  street  is  breath- 
ing a  wholly  different  atmosphere. 

The  stage  coach  and  the  corduroy  road 
were  modern  inventions  when  the  political 
conceptions  to  which  we  still  adhere  were 
already  rimy  with  age.  Political  parties 
built  on  oratory  and  abstract  principles,  just 
as  ours  are,  were  rife  in  Constantinople  be- 
fore the  incursion  of  the  Turks. 

It  is  possible  to  explain  this  backwardness 
of  politics.  The  truth  seems  to  be  that  the 
modern  scientific  spirit  moves  in  a  path  of 
progressive  conquest  from  the  circumference 
to  the  centre  of  human  interest.  It  first 


82  THE  GREAT  NEWS 

subdues  those  tracts  of  life  that  matter  least, 
and  then  advances  through  stubborn  mental 
obstacles,  toward  the  focus  of  social  vitality. 
Thus  it  was  natural  that  the  first  and  most 
perfect  conquest  of  the  scientific  spirit  should 
have  been  accomplished  in  the  realm  of  as- 
tronomy— because  the  stars  stand  farthest 
from  the  heat  of  life.  The  last  and  consum- 
mating victories  are  now  to  be  won  in  so- 
ciology or  politics — which  is  the  vortex  of 
human  feeling,  the  centre  of  the  most  pas- 
sionate concerns  of  mankind. 

The  enormous  mental  and  spiritual  revo- 
lution which  Mr.  Alden  describes  as  the 
work  of  the  last  fifty  years,  is  the  gathering 
of  the  social  forces  at  the  emotional  centre 
of  modern  life — forces  that  are  now  to  be 
deployed  upon  the  field  of  politics. 

Our  party  politics  is  an  anachronism  so 
gross  that  it  affronts  the  rational  instinct 
of  modern  man.  The  attempt  to  get  social 
progress,  or  even  the  idea  of  progress,  out 
of  this  bifurcation  of  a  continental  people 


MODERNIZING  POLITICS      83 

into  two  schools  of  abstract  thought — 
schools  so  hazy  in  their  differences  that  no 
living  doctor  of  philosophy  has  been  able  to 
offer  a  sufficing  definition — is  an  undertak- 
ing that  would  have  confounded  Alcuin  or 
the  Venerable  Bede.  It  might  have  over- 
taxed the  dialectic  champions  of  "the  Blues" 
and  "the  Greens"  in  old  Byzantium. 

In  fairness  it  must  be  admitted  though 
that  the  apologists  of  our  antique  political 
customs  do  not  any  longer  regard  the  party 
differences  as  intellectual.  Some  say  that 
one  party  exists  for  privilege  and  plunder 
and  the  other  for  honesty — which  is  of 
course  an  abandonment  of  that  belief  in  the 
general  good  faith  which  is  the  basis  of  de- 
mocracy. Others  say  that  the  distinction  is 
neither  intellectual  nor  moral,  but  tempera- 
mental— that  half  of  mankind  is  so  consti- 
tuted from  the  cradle  that  it  loves  to  drag 
forward  the  car  of  progress,  and  that  the 
other  half  for  similar  reasons  loves  to  drag 
it  backward.  One  need  hardly  trouble  to 
dispute  such  myths  in  the  presence  of  mod- 


84  THE  GREAT  NEWS 

ern  psychology.  It  is  clear  now  to  all  ob- 
servers that  progressiveness  and  conserva- 
tism are  simply  the  two  halves  of  sanity. 

If  Mi.  Alden  is  right  in  saying  that  the 
American  mind  has  been  modernized  and 
has  escaped  from  the  thralldom  of  the  Pow- 
ers of  the  Air,  it  is  safe  to  predict  the  ap- 
proach of  a  new  politics  informed  and  vital- 
ized with  modern  realism.  One  may  foresee 
the  near  appearance  of  a  political  organiza- 
tion to  which  an  energetic  American  man 
may  commit  himself  without  regard  to 
scholastic  philosophy,  class-interest  or  any 
sanguine  or  bilious  bias. 

Mr.  Seth  Low  urges  upon  the  Constitu- 
tional Convention  at  Albany  the  idea  that 
state  politics  ought  to  be  separated  from  na- 
tional politics,  that  the  party-cleavage  along 
national  lines  ought  not  to  affect  state  issues. 
But  why  should  the  national  fission  be  so 
scrupulously  fostered?  Is  it  not  a  pure  sac- 
rifice to  the  Powers  of  the  Air?  Any  man 
with  a  touch  of  mental  modernness  is  com- 


MODERNIZING  POLITICS      85 

pelled  nowadays  to  take  note  of  the  fact  that 
all  the  vital  national  issues  are,  by  very  stress 
of  circumstances,  departisanized.  The 
brave  old-fashioned  partisans  are  themselves 
the  first  to  cry  out  that  party-discussions  on 
national  matters  must  be  abandoned — when- 
ever there  is  anything  important  to  discuss. 
Our  national  policies  in  their  relation  to  real 
world  issues  are  framed  and  executed  in  a 
hush.  It  is  agreed  on  all  hands  that  the  tar- 
iff should  be  framed  by  a  non-partisan 
board.  The  case  is  practically  the  same  with 
internal  national  issues  so  far  as  they  are 
supposed  to  be  vital.  The  Federal  Reserve 
Bank  board  and  the  two  commissions  on 
inter-state  commerce  are  planned  by  law 
to  be  non-partisan.  Everybody  shudders  at 
the  idea  that  banking  or  business  or  educa- 
tion or  taxation  or  religion  or  the  judicial 
office  or  foreign  affairs  or  the  conservation 
of  the  national  resources  should  be  in  any 
wise  affected  by  party-politics.  With  so 
many  things  "taken  out  of  politics,"  it  is 
difficult  to  discover  what  has  been  left  in — 


86  THE  GREAT  NEWS 

except  a  methodical  wearing  down  of  the 
political  forces  of  the  country  through  a 
system  that  cancels  nearly  everybody  out, 
by  setting  him  in  senseless  opposition  to 
somebody  else.  Is  this  not  the  sort  of  thing 
that  feeble  spirits  delight  in — and  a  few  sin- 
ister persons  with  axes  to  grind? 

The  English  party-system — upon  which 
ours  was  modelled — had  in  its  origin  a  clear 
historic  significance.  One  party  stood  for 
the  authority  of  the  King  and  the  Powers 
of  the  Air;  the  other  for  the  authority  of 
the  public  and  the  powers  of  the  earth.  It 
may  be  that  that  issue  in  its  deepest  essence 
has  still  to  be  fought  out  to  a  finish  in  the 
United  States — though  we  must  insist  that 
only  one  of  the  parties  named  is  indigenous 
to  this  soil. 

It  is  indeed  obvious  that,  in  a  somewhat 
dim  and  indefinite  manner,  the  spiritual  tra- 
dition of  English  toryism  has  woven  its  pat- 
tern into  the  history  of  the  United  States. 
The  Democratic  party — the  only  party  that 


MODERNIZING  POLITICS      87 

has  endured  from  the  beginning  of  the 
Government — has,  with  all  its  faults  and  fu- 
tilities, been  comparatively  free  from  this 
affection;  while  the  party  that  under  various 
names  has  stood  in  opposition  to  the  Demo- 
cratic party,  has  been  more  or  less  affected 
by  a  modified  kind  of  toryism.  There  have 
been  moments  in  which  Federalists,  Whigs 
and  Republicans  have  seemed  to  express 
some  doubt  of  the  democratic  principle.  But 
for  half  a  century  the  Republican  party,  like 
the  rest  of  the  people,  has  been  exposed  to 
the  modernizing  spiritual  influences  that 
Mr.  Alden  describes,  and  it  would  be  easy 
to  argue  that  the  fragments  now  left  of  it, 
are  quite  as  modern  as  the  rest  of  the 
country. 

It  should  be  admitted  that  the  Democratic 
party — with  the  leadership  of  Woodrow 
Wilson  and  under  the  pressure  of  the  world- 
trial  that  is  now  forcing  the  American  peo- 
ple to  a  fresh  and  transforming  unity — is 
at  least  a  kind  of  placenta  for  the  gestation 


88          THE  GREAT  NEWS 

of  a  modern  politics,  a  politics  standing  for 
all  that  America  stands  for. 

Having  actual  possession  of  the  govern- 
mental powers  in  times  when  all  things  melt 
and  flow  toward  a  new  mould  of  high-tem- 
pered Americanism,  it  should  be  plain  that 
all  the  democracy  and  modernity  of  the  coun- 
try is  likely  to  flow  into  the  organization  that 
supports  the  President;  and  that  the  sur- 
viving Tories  and  reactionaries  and  all  who 
worship  the  Prince  of  the  Powers  of  the  Air 
are  likely  to  he  driven  into  opposition. 

But  of  course  it  is  to  be  admitted  that  the 
mere  historical  convenience  of  the  Demo- 
cratic party  as  an  agent  of  political  regen- 
eration is  not  conclusive.  If  Democrats  fail 
to  seize  their  opportunity  it  will  pass  to 
other  hands.  Historic  changes  follow  the 
lines  of  least  resistance.  All  that  can  be 
said  with  confidence  is  that  the  Democratic 
party  has  first  chance,  and  that  the  time  has 
come  for  the  Democracy  to  put  aside  its  par- 
ticularism and  to  translate  itself  into  a  com- 
mon noun.  It  should  now  cease  to  be  a  pe- 


MODERNIZING  POLITICS      89 

culiar  sect  and  make  haste  to  become  that 
democracy  toward  which  all  the  prophets 
of  the  spiritual  renascence  of  mankind  have 
stretched  out  their  hands  for  so  many  ages. 
It  is  the  nature  of  the  democracy  of  Jef- 
ferson and  Mazzini  and  the  rest  who  have 
understood — to  hate  doctrinaire  disputes 
and  to  bring  men  together  on  a  working 
basis.  It  is  the  very  heart  of  democracy  to 
acknowledge  that  theories  are  tools  to  be 
handled,  that  they  have  no  power  of  guid- 
ance ;  and  that  most  of  the  fine  things  in  life 
must  be  held  absolutely  in  common,  across 
all  boundaries  of  intellectual  and  social  dif- 
ference— else  they  cannot  be  held  at  all. 

By  the  chastisement  of  war  men  are 
whipped  into  an  understanding  of  such 
truths.  It  is  plainly  impossible  for  the 
United  States  to  stand  up  and  witness  for 
its  own  democratic  genius  against  the  dis- 
ciplined solidarity  of  European  states,  un- 
less this  democracy  can  furnish  an  equal  or 
superior  discipline. 


90          THE  GREAT  NEWS 

There  is  a  democracy  of  War.  There  is 
a  social  sacrament  of  black  bread  and  the 
wine  of  bleeding  wounds.  There  is  a  unity 
that  is  got  by  hammer  strokes  and  the  pres- 
sure of  invasions.  This  too  is  spiritual  and 
binds  men  by  the  heart.  It  also  endows  them 
with  a  singular  directness  of  mind  and  an 
extraordinary  energy  in  the  handling  of 
tools  and  materials.  But  the  democracy  of 
war  is  weighted  with  an  inexpiable  curse  of 
barrenness.  Its  high  human  vitality  within, 
hardens  toward  the  outer  world  with  a  repel- 
lent burr  and  shell  so  thick  that  it  can  never 
germinate  into  the  catholic  democracy  that 
is  one  with  the  universal  realm  of  art  and 
science.  The  democracy  of  war  lives  and 
dies  sterile — except  that  it  stands  to  witness 
in  the  reiterated  passion  and  sacrifice  of  the 
race,  for  the  practicability  of  another  democ- 
racy that  shall  be  delivered  from  the  curse 
of  barrenness  and  that  shall  grow  and  cover 
the  earth.  This  must  come  out  of  a  nation 
that  does  not  need  to  be  hammered  into  re- 
ality, and  that  can  be  as  actual  and  intelli- 


MODERNIZING  POLITICS      91 

gent  in  peace  as  others  have  been  in  the 
arousal  of  fear  and  the  stress  of  battle. 

There  are  grave  reasons  for  believing  that 
there  will  never  be  peace  in  this  world  any 
more  on  a  basis  of  international  displomacies 
and  legal  theories  of  abstract  justice.  That 
moment  in  recent  history  "when  the  human 
reason  and  imagination,  following  the 
course  long  before  taken  by  science,  broke 
with  all  forms  of  scholasticism,  of  tradi- 
tional authority  and  of  merely  notional 
thinking" — was  a  fateful  moment  for  weal 
or  woe.  It  abolished  all  the  long  truces  and 
temporary  adjustments  of  irreconcilable 
claims.  It  drove  the  minds  of  men  down  to 
the  basis  of  permanent  common  interest. 
Thenceforth  it  became  necessary  to  give  up 
the  idea  of  uniting  vast  masses  under  the 
kind  of  a  law  that  has  only  an  ideal  validity, 
and  that  furnishes  no  reflection  of  the  lives 
of  ordinary  people  and  the  things  they  really 
care  about. 

One  can  have  no  apprehension  of  the  his- 


92  THE  GREAT  NEWS 

torical  consequences  that  must  follow  upon 
the  penetration  of  the  modern  scientific 
spirit  into  politics,  until  one  has  meditated 
on  certain  truths  that  may  be  formulated  as 
follows : 

The  political  atmosphere  of  the  world  has 
been  "inhabited  and  dominated  for  cen- 
turies" by  theories  of  right  and  duty  that 
are  not  practical  from  the  point  of  view  of 
general  well-being,  and  not  normal  from 
the  point  of  view  of  wholesome  human  na- 
ture. 

The  political  and  legal  systems  formed 
under  these  antique  influences  depend  for 
their  support  upon  an  unmodern  and  un- 
scientific state  of  mind  in  the  mass  of  the 
people. 

This  support  is  now  withdrawn  or  in 
rapid  process  of  being  withdrawn. 

In  Europe  the  antique  systems  are  crash- 
ing down  for  lack  of  support  and  are  being 
replaced  by  a  terrific  science  and  modernity 
of  war. 

It  is  probable  that  the  old  systems  will  be 


MODERNIZING  POLITICS      93 

restored  and  maintained  in  the  countries 
where  the  popular  mind  is  not  deeply  pene- 
trated by  the  modern  spirit — notably  in 
Russia. 

Nothing  can  restore  the  old-fashioned  po- 
litical structure  in  Great  Britain  and  France 
except  a  backward  turning  in  the  popular 
attitude  toward  life,  through  a  revival  of 
Bourbonism  or  Toryism — which  is  not  prob- 
able in  France  and  scarcely  possible  in 
Great  Britain. 

In  the  United  States  there  has  not  yet 
appeared  any  trace  of  the  kind  of  spiritual 
or  intellectual  movement  that  could  possibly 
check  the  modernizing  of  politics. 

It  therefore  seems  unlikely  that  any  means 
could  be  found — even  if  it  were  desirable — 
to  maintain  governmental  authority  here  in 
that  aloofness  from  the  common  life  and  the 
work-a-day  world  to  which  we  are  accus- 
tomed. 

Thus  we  must  make  haste  to  establish  in 
the  United  States  a  solid  and  scientific  basis 


94  THE  GREAT  NEWS 

for  law.  The  vast  fabric  of  American  civi- 
lization now  hangs  perilously  from  the  raft- 
ers of  a  decaying  temple  of  justice.  We 
must  underpin  this  fabric — must  lay  upon 
the  solid  ground  the  sills  of  democratic  law. 

The  quintessence  of  democratic  law  is 
that  it  depends  for  its  sanction  and  author- 
ity., not  upon  any  abstract  theory  of  right, 
but  upon  the  concrete  feeling  in  the  mass  of 
the  people  that  they  have  a  real  community 
of  interest  in  the  gains  and  honors  of  civi- 
lization. 

If  men  were  disembodied  spirits  it  might 
be  possible  to  establish  this  sense  of  a  real 
community  of  interest  by  mere  teaching, 
preaching  and  praying.  But  since  they  are 
organically  related  to  the  materials  of  na- 
ture, it  is  absolutely  impossible  to  realize 
a  community  of  interest  on  purely  notional 
or  ideal  grounds.  It  is  necessary  that  the 
communion  have  a  physical  or  sacramental 
basis — that  it  take  continual  account  of 
economics  and  the  exigencies  of  bodily  ex- 
istence. 


MODERNIZING  POLITICS      95 

Our  political  and  juridic  tradition  has 
tacitly  recognized  the  fact  that  there  can  be 
no  community  of  interest  without  economic 
solidarity — therefore  it  has  laid  no  emphasis 
upon  community  of  interest.  The  idea  ap- 
pears occasionally  indeed  and  casually  in 
pleadings  and  adjudications  under  "general 
welfare"  clauses,  and  in  vague  applications 
of  the  doctrine  of  "police  power" — but  it 
has  no  firm  footing  in  our  courts.  The  lead- 
ing lawyers  and  publicists  of  the  Roman  and 
Anglican  tradition  have  endeavored  to  find 
a  basis  of  jurisprudence,  not  in  the  idea  of 
a  vital  community  of  interest  but  in  the  idea 
of  an  intellectual  consensus.  They  have  in 
effect  treated  men  as  if  they  were  indeed  dis- 
embodied spirits — as  if  ideals  and  notions 
were  enough.  It  was  impossible  otherwise 
to  maintain  the  prerogatives  of  a  privileged 
class,  and  to  hush  the  cry  of  the  hungry  and 
the  disinherited. 

Nothing  is  more  marvellous  than  the  long 
survival  of  this  idealistic  and  notional  kind 
of  law,  in  face  of  the  importunate  physical 


96  THE  GREAT  NEWS 

facts — unless  the  complacent  expectation 
that  it  will  still  survive,  in  spite  of  the  tre- 
mendous demonstrations  of  the  modern 
spirit,  is  more  marvellous. 

Marvellous  too  is  the  mirage  of  those  who 
regard  the  coming  of  a  concrete  and  eco- 
nomic politics  as  a  counsel  of  visionaries. 
Such  is  the  mental  inversion  induced  by  the 
long  ages  of  accepted  and  standardized  ab- 
stractions that  it  is  they,  and  not  the  things 
of  nature,  that  seem  solid.  Lawyers  and 
politicians  whose  minds  are  a  tissue  of  legal 
and  conventional  fictions  and  who  have 
hardly  in  their  whole  lives  felt  the  reaction 
of  a  large  objective  fact — turn  comfortably 
inward  to  escape  the  contact  of  the  "ideal- 
ists" who  insist  upon  taking  political  ac- 
count of  stark  nature  and  the  primal  need 
of  food  and  clothes. 

But  not  all  Americans  are  rapt  in  the  spell 
of  such  enchantment.  There  are  some  with 
minds  and  wills  that  can  work  out-of-doors. 


MODERNIZING  POLITICS      97 

These  have  now  to  seize  upon  the  truth  that 
there  is  pressing  need  here  of  a  practical 
politics.  It  is  necessary  to  get  down  to  busi- 
ness, with  our  politics.  It  is  time  to  stop 
parroting  out  of  academic  books  the  fond 
old  sayings  about  the  oneness  of  capital  and 
labor.  That  is  a  theory  of  the  cloister.  It 
can  be  translated  into  a  fact.  But  it  is  not 
yet  a  fact.  It  is  absolutely  necessary  that 
it  be  turned  into  a  fact. 

//  this  actualizing  of  a  community  of  in- 
terest between  owners  and  workers  cannot 
be  accomplished  within  the  next  year  or  two 
the  social  fabric  in  this  country  cannot  be 
sustained  otherwise  than  by  militarism  and 
foreign  wars.  This  is  true  because  the  re- 
cent "revolution  in  human  thought  and  feel- 
ing and  changed  attitude  toward  life  and 
the  world,"  has  reduced  all  modernized  na- 
tions to  a  choice  between  the  free  democracy 
of  productive  art  and  science,  and  the  mar- 
tial democracy  of  the  black  bread.  No  so- 
ciety can  endure  without  a  common  law — a 
meeting  of  minds.  The  rise  of  the  modern 


98  THE  GREAT  NEWS 

and  scientific  spirit  dissolves  the  mental  en- 
tente,  the  common  respect  for  abstract  legal 
theories,  that  sustained  the  social  privileges 
of  yesterday.  We  are  launched  into  a  new 
world  in  which  intellectual  assent  to  abstract 
principles  must  be  replaced  by  the  vivid  feel- 
ing of  a  common  interest.  This  new  and 
democratic  basis  of  law  can  be  achieved 
either  by  free  and  spontaneous  action  from 
within,  or  by  the  pressure  of  threatened  in- 
vasion from  without.  A  modernized  nation 
must  lapse  into  anarchy  unless  it  can  get,  in 
one  of  these  ways  or  the  other,  a  realistic 
and  scientific  politics — a  material  and  tan- 
gible community  of  interest  in  white  bread 
or  black. 

It  is  not  believable  that  the  United  States 
is  so  poor  in  masculine  and  objective  minds 
that  such  an  emergency  cannot  be  under- 
stood and  mastered  before  the  days  of  grace 
have  passed.  Men  of  capacity  know  that' 
our  present  party  politics  is  futile  and 


MODERNIZING  POLITICS      99 

puerile,  offering  no  prospect  of  adequate 
action. 

Such  men — and  there  are  hundreds  of 
them — must  perceive  that  the  tremendous 
force  of  the  modern  system  of  finance  and 
industry  is  all  on  the  side  of  the  mental  revo- 
lution that  has  discredited  the  abstract 
idealism  of  law  and  summoned  men  to  a 
community  of  interest  in  material  things — 
that  this  intense  realism  and  modernism  of 
business  acts  like  a  mordant  acid  upon  the 
sentimental  props  that  supported  the  old 
structure  of  privilege,  and  puts  into  the 
minds  of  workingmen  the  new  and  irresis- 
tible ideas  that  must  compel  the  system  to 
democratize  itself. 

These  men,  and  all  men  of  first-rate  un- 
derstanding who  are  engaged  in  great  af- 
fairs, must  perceive  that  the  economic  sys- 
tem will  descend  to  chaos,  unless  there  shall 
soon  be  lifted  up  in  New  York,  Chicago  and 
San  Francisco  a  standard  of  conciliation  and 
construction  that  shall  signify  a  real  com- 
munity of  interest  in  material  things. 


100         THE  GREAT  NEWS 

It  is  not  a  question  of  the  right  to  work 
or  the  right  to  be  fed,  or  any  other  gener- 
ality of  legalism  or  the  debating  club.  The 
point  is  that  the  project  of  material  civiliza- 
tion is  vast  and  venturesome,  and  not  a  man 
can  be  spared.  We  are  at  war  with  the  nat- 
ural difficulties  of  existence  and  the  enor- 
mous inertia  of  physical  laws. 

The  standard  of  the  new  economic  politics 
is  a  banner  of  militant  art  and  science  flung 
out  against  all  ugliness  and  misery  and  the 
fatalism  of  blind  forces.  The  old  legal  ab- 
stractions are  abrogated  because  they  doted 
on  "juridic  niceties"  and  the  insoluble  prob- 
lem of  the  comparative  moral  deserts  of 
mortal  men.  They  were  too  confoundedly 
irrelevant  to  the  practical  problem  of  build- 
ing habitable  cities  on  this  precarious  planet. 

The  standard  needs  only  to  be  set  up 
where  people  can  see.  The  youth  and  faith, 
the  skill  and  experience  of  the  United  States 
will  rally  to  it.  The  minds  of  the  people  are 
fully  prepared.  They  await  only  the  ges- 
ture of  precipitation  on  the  part  of  men  that 


MODERNIZING  POLITICS    101 

can  be  believed  in.  The  American  people 
are  sick  of  the  old  sordid  and  sentimental 
politics. 

The  precipitation  can  be  accomplished  in 
every  town,  with  a  tenth  part  of  the  preach- 
ing that  it  takes  to  conduct  an  ordinary 
presidential  campaign.  And  this  is  the  only 
kind  of  a  presidential  campaign  that  has 
any  real  pertinency  to  the  exigence  of  these 
times  and  to  the  circumstances  that  may  be 
expected  to  beset  the  coming  year. 

It  is  a  discovery  of  modern  psychology 
that  the  beginnings  of  the  best  adventures 
of  mankind  are  usually  made  without  pre- 
meditation, and  that  institutions  rooted  in 
impulse,  rather  than  intellect,  are  most  en- 
during. "The  children  of  this  world"  are 
wise  after  their  manner.  Thus  we  are  likely 
to  find,  when  we  escape  from  the  mental 
fastidiousness  of  academic  politics,  that  the 
bi-partisan  or  supra-partisan  political  "ma- 
chine," which  now  lies  under  such  reproba- 
tion— is  in  fact  the  crude,  instinctive  begin- 


102         THE  GREAT  NEWS 

ning  of  a  great  adventure  in  democracy. 
For  the  machine  is  at  bottom  a  rough  sketch 
or  caricature  of  that  economic  politics,  that 
all-the-year-round  political  team-play,  which 
is  so  greatly  to  be  desired. 

The  machine  is  obsolete  because  of  its 
secrecy  and  its  inaccessibility  to  large  social 
considerations.  Yet  it  is  valid  as  a  fore- 
shadowing of  the  need  and  use  of  a  perma- 
nent primary,  purged  of  abstract  political 
theories  and  the  cant  of  disinterestedness — 
a  massing  of  the  credits  and  powers  of  men 
who  are  not  scrupulous  to  distinguish  be- 
tween public  and  private  business,  because 
they  cannot  separate  their  desire  for  riches 
and  honor,  from  their  desire  for  reality  and 
accomplishment  in  their  vocations — and  who 
know  that  it  is  necessary  for  masters  of  arts 
and  engineers  to  conspire  and  stand  to- 
gether, if  they  object  to  being  ruled  by 
"knaves  and  dastards." 

Thus  by  means  of  a  New  Machine,  organ- 
ized in  the  spirit  of  the  public  school,  main- 
tained by  the  few  who  are  capable  of  politi- 


MODERNIZING  POLITICS     103 

cal  initiative,  and  supported  by  majorities, 
the  business  system  can  rectify  its  processes, 
can  achieve  that  autonomy  and  control  of  its 
own  organs  which  is  necessary  for  the  sure 
and  continuous  mobilization  of  productive 
forces;  and  can,  in  short,  give  full  expres- 
sion to  its  own  genetic  principle — which  is 
also  the  root  principle  of  democracy — 
namely,  that  there  is  no  legitimate  power  but 
the  power  to  deliver  goods. 


V 

FIVE  ACTS  OF  THE  EUROPEAN  TRAGEDY 


solution  of  the  political  problem 
•1  created  by  the  rise  of  the  business  or- 
ganization, requires  that  politics  shall  cease 
to  be  passive,  abstract  and  critical.  There 
is  need  of  a  new  and  more  pragmatic  poli- 
tics. The  democratic  party  in  modern  states 
must  tend  to  become  an  all-the-year-round 
association  in  local  communities,  devoted 
not  to  historical  political  theories  or  legal 
propositions,  but  to  practical  co-operation 
for  the  advancement  of  the  arts  and 
sciences  and  the  raising  of  the  standard  of 
living. 

The  modern  business  organization,  in  its 
ground-plan  and  general  purpose  —  as  dis- 
tinguished from  its  self-destructive  perver- 
sions —  is  a  democracy.  It  intends  to  estab- 

104 


THE  EUROPEAN  TRAGEDY  105 

lish  a  scale  of  social  powers  in  which  every 
man  shall  have  place  and  influence  in  pro- 
portion to  his  productive  competence.  Its 
rule  is  intrinsic  and  self-vindicating — the 
rule  of  those  who  serve.  It  hates  all  forms 
of  arbitrary  power.  Monopoly  is  poison 
to  its  constitution  and  tends  to  swift  paraly- 
sis of  all  its  organs. 

The  business  organization  is  based  on 
Capital,  Credit,  Contract  and  the  Corporate 
Idea, — four  principles  of  distinct  demo- 
cratic significance,  tending  to  a  high  devel- 
opment of  creative  power  and  the  widest 
diffusion  of  well-being. 

The  law  of  Capital  requires  that  all 
wealth  shall  be  mobilized ;  that  dead  or  ster- 
ile wealth  shall  be  transmuted  into  wealth 
that  is  living  and  reproductive. 

The  law  of  Credit  requires  that  men  shall 
have  control  of  tools  in  proportion  to  their 
proved  capacity  to  use  them. 

The  law  of  Contract  requires  the  elimina- 
tion of  fraud  and  duress,  so  that  no  one  may 
derive  a  private  advantage  from  knowledge 


106         THE  GREAT  NEWS 

that  ought  to  be  communicated,  and  so  that 
well-fed  people  may  not  drive  hard  bargains 
with  the  hungry. 

The  law  of  the  Corporation  requires  that 
personal  liability  shall  be  limited,  wherever 
the  knowledge  and  experience  of  society  at 
large  can  stand  the  strain  of  the  reversionary 
liability — in  order  that  enterprise  may  be 
constantly  pushed  forward  into  new  and  dif- 
ficult fields. 

Whenever  the  business  organization  de- 
parts from  these  principles,  it  violates  its 
own  constitution.  It  becomes  unpractical 
and  unbusinesslike.  Its  machineries  grind 
their  own  cogs,  and  the  wheels  slow  down. 
Hence  come  business  depressions,  panics 
and  financial  catastrophes. 

So  long  as  political  authority  lives  and 
moves  in  a  realm  of  antique  legality — re- 
fusing to  understand  that  business  must  be 
moralized  and  socialized  according  to  its 
own  inner  law — business  will  be  compelled 
to  abandon  its  own  natural  democracy  in 


THE  EUROPEAN  TRAGEDY  107 

order  to  grasp  weapons  wherewith  to  com- 
bat the  false  democracy  of  politics.  It  is 
idle  to  hope  for  democracy  in  business,  so 
long  as  we  stick  to  the  ancient  superstition 
that  business  is  necessarily  baser  than  poli- 
tics— so  that  it  is  wrong  to  be  predacious  in 
a  political  office,  but  right  in  a  business  of- 
fice. If  we  will  insist  that  a  sense  of  social 
obligation  is  matter  of  course  in  politics,  but 
Utopian  in  business,  we  shall  not  escape,  nor 
deserve  to  escape  the  calamity  that  has  fall- 
en upon  Europe  for  this  cause. 

The  war  in  Europe  is  at  bottom  not  a 
conflict  of  races  or  of  political  ambitions. 
It  is  the  explosion  of  a  bad  business  system. 
It  is  the  judgment  day  of  plutocracy. 

Nothing  of  first-rate  importance  could 
have  happened  in  the  modern  world  that  did 
not  have  its  root  in  the  stupendous  and  un- 
precedented organization  of  finance  and  in- 
dustry. This  organization  is  comparable  as 
has  been  suggested  to  the  vast  international 
fabric  of  the  Mediaeval  Church.  The  busi- 


108          THE  GREAT  NEWS 

ness  system  of  Europe  has  now  been  shat- 
tered— as  the  Church  was  shattered  at  the 
crisis  of  the  Reformation. 

The  business  organization  is  not  de- 
stroyed. But  it  can  recover  a  cosmopolitan 
character  only  by  deepening  its  life  to  the 
grounds  of  its  essential  constitution. 

A  normal  business  system  is  one  in  which 
profit  or  successful  market  competition  is 
dependent  upon  social  efficiency,  i.e.,  upon 
successful  competition  in  the  field  of  tech- 
nology. In  the  degree  in  which  command 
of  the  market  is  made  independent  of  the 
control  of  natural  forces,  in  that  degree 
monopoly  prevails.  Thus  a  social  system  in 
which  the  mental  driving  force  of  men  is 
ever  more  and  more  directed  to  the  mas- 
tery of  the  market,  and  ever  less  and  less 
to  the  mastery  of  materials, — must  be  re- 
garded as  organically  diseased. 

Such  was  the  actual  case  of  the  business 
system  that  has  come  to  its  end  in  Western 
Europe. 


THE  EUROPEAN  TRAGEDY  109 

During  most  of  the  nineteenth  century, 
business  in  Europe  and  America  made 
steady  technological  gains.  An  increasing 
percentage  of  the  emotional  energy  of  the 
race  was  diverted  from  the  bootless  wrestle 
of  mind  against  mind  for  place  and  power, 
and  was  invested  in  the  struggle  of  man- 
kind against  the  natural  difficulties  of  exist- 
ence. The  United  States — partly  because 
of  its  extraordinary  natural  resources  and 
partly  because  it  got  its  population  from  the 
pick  of  European  stocks — led  the  way  in 
this  international  development  of  creative 
power. 

Toward  the  end  of  this,  period  monopolis- 
tic trusts  appeared.  They  stood  out  from 
the  surrounding  business  area  as  definite 
and  definable  things.  It  was  possible  to 
count  them.  It  was  reasonable  and  useful 
to  study  them  in  detail. 

But  before  the  beginning  of  the  twen- 
tieth century  this  ceased  to  be  the  case  in 
Europe.  For  more  than  twenty  years  in 
Great  Britain,  France  and  some  other  Eu- 


110         THE  GREAT  NEWS 

ropean  countries  the  struggle  for  the  con- 
trol of  the  market  has  unceasingly  gained 
upon  the  earth-struggle.  It  was  as  if  the 
hand  of  man  had  slowly  but  steadily  re- 
laxed its  earth-hold.  The  result  has  been 
that  the  ordinary  unprivileged  man  has 
found  it  harder  every  year  to  get  a  living. 
The  monopolistic  trust  ceased  to  be  an  ex- 
ceptional thing.  Its  principle  became  all- 
pervading.  It  struck  into  the  heart  of  so- 
ciety. It  held  the  controlling  centre  of  the 
business  system. 

On  the  other  hand,  it  came  to  pass  that 
the  United  States,  the  country  in  which 
trusts  continue  to  be  outstanding  facts  eas- 
ily to  be  described  and  enumerated,  was  pre- 
cisely the  one  great  industrial  country  in 
which  the  trust-principle  was  not  all-per- 
vading. 

The  modern  business  organization  cen- 
tres in  the  bank.  All  modern  business  takes 
its  moral  and  mental  tone  from  the  bank- 
ing business.  It  was  not  always  so.  There 


THE  EUROPEAN  TRAGEDY  111 

was  a  time  when  banking  was  a  trade  like 
any  other — just  one  of  many  commercial 
activities.  In  the  beginning  the  banker  sat 
cross-legged  behind  a  bench  heaped  with 
coins,  and  changed  one  kind  of  money  into 
another.  The  banker  grew  in  time  to  be  a 
broker  in  exchange  instruments  and  certifi- 
cates of  debt.  But  it  was  not  until  the  days 
of  the  Rothschild  brothers  that  the  banker 
became  master  of  credit  and  ruler  of  the 
bourse.  It  was  through  the  flotation  of 
modern  joint  stock  companies  and  the  de- 
velopment of  the  modern  system  of  public 
debts  that  the  banker  passed  from  the  cir- 
cumference to  the  centre  of  society  and  be- 
came sovereign  in  the  world  of  business. 

Probably  nobody  deliberately  planned  the 
transfer  of  the  centre  of  gravity  of  modern 
society  from  the  field  of  politics  to  that  of 
finance.  It  happened,  as  many  prodigious 
things  happen  in  history — silently  and  with- 
out observation. 

It  was  reasonable  and  inevitable  that  the 
controlling  centre  of  modern  society  should 


112         THE  GREAT  NEWS 

shift  from  abstract  politics  to  business, — 
from  the  world  of  theories  to  the  world  of 
work.  But  it  was  neither  reasonable  nor 
inevitable  that  this  new  centre  of  control 
should  be  administered  by  men  having  no 
interest  in  the  working  world  except  a 
private  profit-making  interest.  It  was  not 
reasonable  and  it  was  not  inevitable  that  all 
the  projectors  of  civilizing  enterprise  should 
have  been  deflected  from  their  social  mis- 
sion and  compelled  to  serve  in  some  degree 
at  least,  the  private  ambitions  of  a  creditor 
caste.  This  was  unreasonable  and  it  might 
have  been  prevented.  But  it  happened  so. 

The  historical  misfortune  or  malfeasance 
which  made  the  banker  master  of  lawyers, 
physicians,  engineers  and  men  of  science — 
whilst  leaving  him  to  be  guided  by  the  social 
ethics  of  the  primitive  money-changer — is 
the  spring  of  the  woes  that  have  come  upon 
the  world  of  business. 

If  a  date  were  to  be  set  to  the  beginning 
of  this  error,  no  date  would  serve  so  well 
as  1694,  the  year  of  the  founding  of  the 


THE  EUROPEAN  TRAGEDY  113 

Bank  of  England.  That  event  fixed  the 
fatal  bent  of  modern  banking.  The  Bank 
of  England  set  itself  up  in  business  by  mak- 
ing itself  chief  creditor  of  the  British  na- 
tion. Its  qualification  for  the  impartial  ad- 
ministration of  the  credit  function  of  so- 
ciety consisted  in  the  fact  that  the  English 
public  owed  it  a  great  deal  of  money.  This 
was  almost  as  if  the  judicial  system  of  Eng- 
land had  been  intrusted  to  judges  who  had 
first  qualified  as  plaintiffs  in  weighty  law 
suits  against  the  commonwealth. 

Following  the  example  of  the  Bank  of 
England,  most  of  the  other  banking  sys- 
tems of  Europe  and  America  have  been 
founded  upon  public  debts.  No  doubt  the 
theory  of  this  procedure  was  that  creditors 
are  bound  to  interest  themselves  in  the  pros- 
perity of  their  debtors.  But  the  theory  is 
gravely  defective.  In  practice  those  whose 
business  is  money-lending  are  mainly  inter- 
ested in  swelling  the  amount  of  their  debt- 
ors' obligations — to  a  bare  inch  from  the 
edge  of  insolvency. 


114         THE  GREAT  NEWS 

Under  modern  conditions  banking  has  be- 
come the  most  intimate  and  vital  of  social 
functions.  The  general  office  of  the  bank- 
ing business  is  the  exchanging  of  private 
debt-certificates  for  certificates  of  public 
debt,  i.e.,  for  money  or  credit.  The  cus- 
tomers of  the  bank  turn  in  to  it  their  docu- 
mented claims  against  individuals;  and  the 
bank  gives  back  to  its  customers,  claims 
against  the  commonwealth. 

Underneath  all  the  disguises  and  compli- 
cations of  modern  banking  the  bottom  fact 
is  that  the  bank  has  become  in  effect  the 
public  market  for  saleable  goods  and  serv- 
ices. That  is  to  say,  that  through  the  sys- 
tem of  bank-discounts,  it  has  become  cus- 
tomary for  the  banker,  as  agent  for  the 
community,  to  appraise  and  underwrite  the 
value  of  commodities  in  exchange.  Thus, 
in  practical  effect,  the  public  buys  and  car- 
ries the  goods,  during  the  interval  that 
elapses  between  the  beginning  and  the 
end  of  an  ordinary  commercial  transac- 
tion. 


THE  EUROPEAN  TRAGEDY  115 

It  is  not  permissible  to  say  that  the  banker 
does  this  in  his  private  character,  and  with- 
out any  public  agency;  for  in  general  the 
banker  would  be  wholly  unable  to  give  ef- 
fectual credits — credits  of  universal  valid- 
ity— if  he  did  not  have  the  backing  of  public 
authority.  The  banks  live  by  their  relation 
to  government  and  law;  and  their  credits 
in  favor  of  their  customers  are  accepted  sole- 
ly because  they  are  believed  to  be  valid 
charges  against  the  public,  charges  which 
the  public  will  everywhere  honor  and  ap- 
prove. 

Modern  banking  has  been  made  a  mys- 
tery impenetrable  to  the  unprofessional  in- 
telligence. The  whole  subject  has  been 
thrown  into  confusion  through  an  effort  to 
treat  the  most  public  profession  in  modern 
life,  in  the  irrelevant  mental  categories  of 
the  money-changing  trade  from  which  it 
grew.  It  is  of  course  not  to  be  supposed 
that  bankers  have  deliberately  conspired  to 
obscure  the  fact  that  the  public  is  a  party 
to  all  modern  banking  transactions.  But 


116         THE  GREAT  NEWS 

there  is  an  atmospheric  pressure  of  class- 
interest.  And  it  is  the  class-interest  of  bank- 
ers to  find  some  means,  whereby  they  may 
always  have  on  their  counters  credits  to  sell 
that  are  really  charges  against  the  public — 
charges  that  the  public  will  pay — whilst 
confessing  in  their  own  person  to  only  an 
irreducible  minimum  of  public  responsi- 
bility. 

It  is,  for  example,  this  class-interest  of 
the  bankers  that  has  succeeded  in  maintain- 
ing even  to  this  day,  and  in  the  face  of  the 
most  dramatic  and  convincing  confutations 
— the  fiction  that  bank-charges  are  made, 
not  against  the  commonwealth,  but  against 
a  "gold  reserve."  Again  and  again  in  times 
of  stress — which  are  the  only  times  in  which 
the  fiction  is  subjected  to  any  test — the 
bankers  of  the  United  States  have  openly 
abandoned  the  fiction,  and  have  resorted  to 
the  general  economic  basis  of  the  common- 
wealth— through  the  issue  of  clearing-house 
certificates  or  otherwise.  Nevertheless  there 
are  people  who  insist  with  the  fixity  of  su- 


THE  EUROPEAN  TRAGEDY  117 

perstition,  that  there  is  no  solid  ground  of 
economics  between  the  golden  cloud-land  of 
financial  orthodoxy  and  the  bottomless  pit  of 
"fiat  money." 

It  is  to  be  admitted  of  course  that — how- 
ever inadequate  metallic  currency  has  proved 
to  be  as  a  basis  for  the  whole  body  of  bank- 
charges — it  is  nevertheless  true  that  "the 
gold  standard"  has  an  important  part  to 
play  in  modern  banking.  When  it  is  un- 
derstood that  the  bank  has  become  the  uni- 
versal market  where  all  values  are  ap- 
praised and  registered,  it  will  be  easier  to 
understand  the  indispensable  usefulness  of 
gold  as  the  unique  commodity  that  furnishes 
the  convenient  "standard"  for  every  ap- 
praisement— since  it  is  the  one  commodity 
that  is  always  and  everywhere  free  from  dis- 
count. It  is  absolutely  marketable.  Be- 
cause gold  has  an  absolute  market  it  fur- 
nishes a  basis  upon  which  to  assess  and  state 
the  marketability  of  all  other  commodities. 
Thus  as  gold  ceases  to  be  a  necessary  "me- 
dium of  exchange,"  it  is  likely  to  become  all 


118         THE  GREAT  NEWS 

the  more  incontestably  the  supreme  meas- 
ure of  value. 


The  economic  system  of  Europe  has  gone 
to  pieces  because  it  was  unpractical  and 
self -contradictory  in  its  ground-plan.  The 
fatality  which  now  fills  the  world  was  in- 
volved in  the  very  nature  of  an  economic 
system  that  was  worked  in  the  interest  of  a 
creditor  class,  and  that  could  not  otherwise 
work  at  all. 

Here  is  an  outline  of  five  acts  in  the  Eu- 
ropean tragedy — a  drama  that  was  driven 
forward  from  generation  to  generation  by  a 
moral  fate  as  irresistible  as  that  revealed  in 
the  inflexible  movement  of  an  ^schylean 
play: 

First,  the  rise  and  development  of  an  ab- 
normal industrial  system  controlled  through 
the  bank  by  men  whose  aim  is,  not  the  ad- 
vancement of  industry,  but  the  accumula- 
tion in  their  own  hands  of  legally  enforce- 
able claims  against  society  at  large. 

Second,  the  splitting  of  society  into  two 


THE  EUROPEAN  TRAGEDY  119 

classes  through  the  chronic  depression  of  all 
domestic  business  except  such  business  as 
tends  to  increase  the  holdings  of  the  creditor 
class. 

Third,  a  political  reaction  of  the  debtor 
and  employe  class  to  compel  the  govern- 
ment to  take  a  hand  in  business ;  and  a  cor- 
responding movement  of  the  creditor  class, 
who  seize  upon  the  government  and  make  it 
their  agent  for  the  exploitation  of  foreign 
fields  of  investment. 

Fourth,  the  rise  of  a  sharp  economic  rival- 
ry among  governments  and  between  allied 
groups  of  governments,  the  cultivation  of 
racial  antagonisms  corresponding  with  these 
economic  interests,  and  the  development  of 
vast  armaments  to  enforce  the  rival  claims. 

Fifth,  the  catastrophe. 

In  reviewing  the  stages  of  this  tragedy,  it 
should  be  observed  concerning  the  first 
fatal  step  that  the  mistake  was  not  merely 
an  error  of  judgment — as  one  might  choose 
a  drug  from  the  wrong  bottle.  The  Euro- 


120         THE  GREAT  NEWS 

pean  peoples  could  never  have  consented  to 
a  business  system  so  devoid  of  science  and 
art  and  of  social  conscience,  if  Europe  had 
not  been  beguiled,  through  ages  of  literary 
and  religious  misunderstanding,  into  the 
false  notion  that  the  world  of  economics  is  a 
kind  of  nether  realm  or  moral  purgatory, 
necessarily  to  be  given  up  to  the  baser  and 
more  carnal  motives,  and  offering  no  fair 
field  for  public  virtues.  It  was  not  pos- 
sible for  Europe  to  understand,  say  in  the 
early  days  of  the  nineteenth  century,  that 
the  business  organization  may  at  length 
evolve  a  cosmopolitan  law  and  order  and  be- 
come the  bearer  of  the  world's  illustrious 
traditions  of  civilization  and  fraternity. 
The  great  war  is  due  to  this  moral  impov- 
erishment of  the  European  financial  organ- 
ization. So  far  from  its  being  true — 
as  many  have  supposed — that  the  financial 
regime  of  Europe  was  a  basis  and  prepara- 
tion for  peace,  it  is  now  revealed  that  un- 
escapable  and  wide-spreading  conflict  was 
the  necessary  consequence  of  that  regime. 


THE  EUROPEAN  TRAGEDY  121 

Passing  then  to  the  second  stage  of  the 
tragedy,  it  is  to  be  noted  that  nearly  every 
European  nation  was  split  into  two  opposing 
classes,  not  because  the  institution  of  private 
property  or  the  natural  evolution  of  busi- 
ness, necessarily  entails  such  a  result — but 
because  European  business  was,  at  heart, 
unbusinesslike.  The  mass  of  the  people 
were  thrown  into  opposition  to  the  business- 
system  because  they  were  shut  out  from  it. 
It  was  not  big  enough  or  strong  enough  to 
contain  them.  It  failed  to  create  a  volume 
of  activity  sufficient  to  absorb  the  working- 
power  of  the  multitude.  Everywhere  there 
were  more  men  than  jobs. 

Following  the  unscientific  and  socially  de- 
structive financial  traditions  of  the  Fug- 
gers  and  Rothschilds,  European  banking 
warped  and  distorted  the  business  system 
and  choked  the  springs  of  enterprise. 
Where  there  is  a  low  voltage  of  enterprise, 
employment  becomes  a  favor  or  franchise 
held  by  permission  of  the  employing  class. 
Thus  political  equality  between  capitalist 


122         THE  GREAT  NEWS 

and  laborer  is  reduced  to  the  level  of  a  sen- 
timentality. 

The  followers  of  Marx  and  Lassalle  have 
been  taught  that  the  social  schism  is  due  to 
the  very  nature  of  modern  business.  That 
is  a  mistake.  The  split  is  due  to  the  cor- 
ruption of  business.  The  fault  is  not  in  the 
principle  of  private  enterprise  or  of  capi- 
talistic production.  The  fault  is  the  sup- 
pression of  enterprise  and  the  destruction  of 
capital  by  those  who  have  had  the  adminis- 
tration of  credit.  The  class-struggle  would 
instantly  disappear  under  a  credit  adminis- 
tration making  securities  secondary  to  pro- 
ductive efficiency.  For  under  such  an  ad- 
ministration the  employed  would  cease  to 
be  a  class  apart.  Enterprise  would  outrun 
the  race-capacity  for  accomplishment,  since 
the  power  to  conceive  workable  designs  is 
greater  than  the  power  to  carry  them  out. 
Competition  among  employers  would  be 
sharper  than  among  employes,  since  it  is 
pleasanter  to  execute  one's  own  plans  than 
another  man's. 


THE  EUROPEAN  TRAGEDY  123 

The  third  act  in  the  European  tragedy 
was  the  perversion  of  government  that 
necessarily  followed  upon  the  severing  of 
classes.  The  governments  of  Europe  were 
turned  to  abnormal  uses,  in  the  instinctive 
social  effort  to  heal  the  class  schism. 

The  state  became  the  cat's  paw  of  finance. 
But  the  first  impulse  in  that  direction  pro- 
ceeded not  from  the  capitalist  class,  but 
from  the  debtors,  the  disaffected  and  disin- 
herited. It  was  the  discomfort  of  the  masses 
that  first  cried  out  for  governmental  inter- 
vention in  business  affairs.  The  people  who 
had  failed  in  the  race  for  a  competency  de- 
manded that  the  government  should  become 
their  agent  for  the  improvement  of  their  es- 
tate. It  would  not  have  been  easy  to  de- 
velop the  European  system  of  commercial 
statesmanship — what  is  called  in  America, 
"dollar  diplomacy" — if  the  road  to  such  an 
innovation  had  not  been  paved  by  popular 
demand.  The  state  first  became  semi-social- 
istic, in  response  to  the  demand  of  the  work- 
ing-class. After  that  it  was  easy  for  the 


124         THE  GREAT  NEWS 

capitalist  class  to  make  the  state  armor- 
bearer  in  the  quest  for  foreign  markets,  and 
bailiff  for  the  collection  of  foreign  debts.  It 
need  not  be  supposed  that  such  men  as  Sir 
Edward  Grey  and  Mr.  Delcasse  intended  to 
make  themselves  the  tools  of  a  privileged 
class.  Nevertheless  the  fact  remains,  that 
the  governments  of  Europe  have  been  per- 
verted to  uneconomic  uses. 

The  malignant  strife  of  state  against 
state  for  the  control  of  foreign  fields  of  in- 
vestment has  never  benefited  the  mass  of 
the  people  in  any  country.  After  the  pur- 
chasing-power of  the  home  people  has  been 
destroyed  by  the  extortions  of  monopoly, 
after  all  prospect  of  large  profit  has  van- 
ished from  short-haul  trade,  there  remain 
the  cheap  labor  of  far  lands  that  know  no 
factory  acts,  the  stores  of  nature  in  places 
that  are  not  well  policed  and  the  naive  cu- 
riosity of  the  friendly  savage.  It  was  pos- 
sible to  exploit  all  these  by  the  help  of  the 
Foreign  Office.  And  Europe  has  done  that 
with  dreadful  consequences. 


THE  EUROPEAN  TRAGEDY  125 

The  terms  of  the  European  trust  prob- 
lem were  presented  on  so  grand  a  scale  that 
American  observers  commonly  failed  to  get 
a  full  view  of  it.  Their  eyes  were  adjusted 
to  such  minor  monopolistic  phenomena  as 
appeared  in  the  American  development  of 
the  oil  and  sugar  trade.  They  were  looking 
for  the  small  conspiracies  and  oppressions 
of  private  corporations.  Consequently 
there  were  few  Americans  with  mental  focus 
upon  the  fact  that  Europe  was  in  effect  all 
one  country  with  a  single  financial  constitu- 
tion; and  that  this  United  States  of  Europe 
was  being  torn  to  pieces,  not  by  private  cor- 
porations like  the  Sugar  Trust  and  the 
Standard  Oil  Company,  but  by  national 
governments  or  public  corporations  that  had 
fallen  into  the  hands  of  monopolists  and 
been  perverted  from  their  historical  and 
civilizing  purpose. 

Thus  the  fourth  act  of  the  European 
tragedy — the  revival  of  obsolescent  racial 
antagonisms  and  the  development  of  crush- 


126         THE  GREAT  NEWS 

ing  armaments — meant  that  under  the 
screens  of  patriotism  and  diplomacy,  rival 
groups  of  monopolists  were  playing  a  dead- 
ly game  for  the  hegemony  of  the  universal 
realm  of  arbitrary  credit  and  commercial 
exploitation. 

It  is  not  necessary  to  suppose  that  the 
rival  financial  groups  that  made  use  of  for- 
eign offices  in  the  struggle  for  "spheres  of 
influence"  in  China,  in  the  division  of  the 
East  and  West  littoral  of  North  Africa,  in 
the  partition  of  Persia  or  the  apportionment 
of  transportation  privileges  in  Asia  Minor 
— were  monsters  of  cunning  and  malice,  or 
even  that  they  were  less  conscientious  than 
ordinary  men.  They  were  in  general  fol- 
lowing the  plot  of  a  sociological  drama, 
whose  lines  they  hardly  understood.  A  near 
view  of  high  financiers  in  European  capitals 
does  not  impress  one  as  a  presence  of  seers 
or  prophets.  Certainly  these  gentlemen  did 
not  generally  foresee  the  catastrophe. 

This  European  shock  is  a  convulsive  ef- 
fort at  readjustment,,  following  upon  an  in- 


THE  EUROPEAN  TRAGEDY  127 

tolerable  crowding  of  rival  monopolies  that 
were  striving  desperately  to  keep  a  footing 
upon  a  shrinking  base  of  exploitation. 

The  German  Empire  was  the  most  pow- 
erful of  the  giant  trusts — because  it  was  the 
most  practical.  It  had  the  firmest  grip  of 
natural  facts.  It  was  isolated  by  the  very 
fact  that  it  worked  in  a  more  scientific 
spirit  than  did  the  great  financial  combina- 
tions of  England,  France  and  Russia. 

One  may  generalize  the  features  of  the 
trust-war  in  Europe  by  stating  the  follow- 
ing propositions : 

All  Europe  belongs  by  nature  to  a  single 
economic  system. 

Europe  can  have  assured  peace  only  when 
that  system  works  with  congruity  and  reci- 
procity in  all  its  parts. 

Any  attempt  of  one  European  nation  to 
get  rich  at  the  expense  of  other  European 
nations  is  bad  business,  and  tends  to  destroy 
the  peace  of  Europe. 

When  several  nations  make  such  an  at- 


128         THE  GREAT  NEWS 

tempt,  the  best  initial  success  will  fall  to  the 
nation  that  is  comparatively  just  to  its  own 
working-class  and  relatively  efficient  in  the 
use  of  tools. 

If  there  are  other  competing  nations  that 
are  decidedly  less  just  and  less  efficient 
they  will  naturally  tend  to  form  a  combina- 
tion against  the  more  successful  monopoly. 

A  sound  international  business  system  is 
a  democratic  organism,  that  must  grow  in  a 
democratic  political  atmosphere,  from  the 
germ-cell  of  the  local  democratic  commu- 
nity. 

Any  social  system  incurably  infested  by 
monopolistic  trusts  must  move  with  a  con- 
stantly accelerated  momentum  toward  an 
explosive  dissolution,  i.e.,  war.  This  is  so 
because  the  volume  of  production  upon 
which  the  trusts  feed,  diminishes  with  in- 
creasing rapidity  in  proportion  to  the  ex- 
acerbation of  the  trust-struggle. 

We  may  dismiss  from  our  minds  any 
thought  that  monopolies  can  set  up  a  per- 


THE  EUROPEAN  TRAGEDY  129 

manent  tyranny  in  Western  Europe  or 
America.  Under  the  conditions  that  obtain 
in  these  parts  of  the  world  monopolies  are  in 
constant  flux.  Little  trusts  can  grow  into 
big  trusts.  But  after  they  have  grown 
big,  they  cannot  combine  and  rule  society. 
They  can  destroy  society  but  they  cannot 
govern  it.  Monopolistic  trusts  cannot  gov- 
ern society  because  privilege  cannot  get  it- 
self believed  in  by  the  mass  of  the  people. 
And  government  is  a  matter  of  the  sincere 
meeting  of  many  minds. 

Thus  the  case  stands  in  Western  Europe 
and  America.  It  is  different  in  Russia. 
Russia  belongs  to  the  past.  And  in  times 
past  it  was  possible  for  a  supreme  economic 
monopoly  to  acquire  a  spiritual  consecra- 
tion— dynastic,  academic,  ecclesiastical — 
and  thus  to  arrest  the  flux  and  unsettlement 
of  power  that  comes  of  the  strife  of  rival 
monopolies.  But  today  in  Western  Europe 
and  America  we  have  lost  irrevocably,  and 
left  behind,  all  chance  of  securing  peace  on 
a  basis  of  consecrated  privilege.  It  has  be- 


130         THE  GREAT  NEWS 

come  impossible  for  us  to  believe  in  the  right 
of  one  social  group  to  enslave  or  exploit  an- 
other. We  permit  it — with  pity,  with  pas- 
sivity or  with  cynicism — but  we  cannot  be- 
lieve in  it.  In  losing  the  ability  to  heartily 
believe  in  privilege  we  have  been  committed 
to  a  great  adventure.  We  have  let  go  of 
the  principal  old-time  safeguard  and  guar- 
anty of  peace.  We  cannot  have  peace  any 
more  except  on  a  new  and  modern  basis. 

We  have  now  entered  into  an  era  of  wars 
— an  era  that  offers  no  promise  of  coming  to 
an  end,  until  our  economic  organization  has 
been,  quite  definitely,  purged  of  privilege. 

For  several  generations  we  have  been  liv- 
ing upon  the  projectile  force  of  what  our 
ancestors  believed,  and  thus  have  been  able 
to  keep  the  peace  on  a  quasi-Russian  basis. 
That  force  is  spent.  We  must  begin  now 
to  live  on  our  own  beliefs. 

The  European  war  is  not  a  conflict  of 
religions  or  of  ethnic  cultures.  The  race- 
hate  that  has  been  put  into  it  is  plainly  fac- 


THE  EUROPEAN  TRAGEDY  131 

titious.  Neither  is  there  a  rivalry  of  po- 
litical principles;  the  outcry  against  the 
Csesarism  of  the  Kaiser  comes  from  those 
who  invoke  against  it  the  Csesarism  of  the 
Czar. 

All  the  evidence  goes  to  show  that  Russia 
was  the  only  country  in  which  the  ruling 
powers  desired  a  general  European  war. 
The  conditions  for  the  explosion  were  pre- 
pared by  a  generation  of  blind  economic 
rivalries, — class  against  class  and  govern- 
ment against  government.  But  the  war  was 
not  planned  or  desired  by  any  class  or  gov- 
ernment in  Western  Europe.  No  class  or 
government  in  Western  Europe  can  gain  by 
the  war. 

Now-a-days  the  nations  are  so  bound  to- 
gether in  economic  relations  that  no  eco- 
nomic tendency  reaches  its  full-orbed  de- 
velopment in  a  single  country.  The  con- 
tinual collisions  and  dislocations  of  rival 
monopolies — through  their  efforts  to  main- 
tain their  standing-ground  upon  a  narrow- 


132         THE  GREAT  NEWS 

ing  base — have  never  been  fully  worked  out 
to  their  violent  issue,  in  any  one  country — 
because  always  hitherto  it  has  been  possible 
to  widen  the  field  of  exploitation  by  taking 
new  spheres  of  economic  influence  from 
feeble  foreign  peoples.  It  was  because  this 
process  had  been  checked  so  far  as  Europe 
was  concerned — and  is  indeed  coming  to  an 
end  throughout  the  whole  world — that  the 
great  economic  combinations  of  Europe 
were  thrown  violently  against  one  another. 
The  European  cataclysm  was  postponed 
again  and  again  by  diplomatic  finesse  and 
delicate  readjustments — until  the  combina- 
tions had  settled  into  two  groups.  Those 
groups — as  has  been  intimated — stood  in 
sharp  contrast,  with  reference  to  the  charac- 
ter of  their  monopolistic  development. 
Trustification  in  the  German  Empire  and 
in  Austria-Hungary,  its  economic  imitator 
and  protege — had  a  patriotic  character  and 
a  kind  of  popular  sanction.  The  German 
trusts  and  cartels  were  openly  fostered  and 
feudalized  under  governmental  auspices. 


THE  EUROPEAN  TRAGEDY, 

The  people  did  not  generally  regard  them 
as  agencies  of  privilege.  Socialism  saw  in 
them  a  tentative  approach  toward  its  own 
ideals.  It  was  as  if  the  whole  German  peo- 
ple had  been  taken  up  into  a  huge  imperial 
trust  for  the  exploitation  of  the  non-Ger- 
man world.  In  its  foreign  enterprises  Ger- 
many kept  its  violence  in  reserve.  Germany 
had  no  Boer  War,  no  Tripolitan  conquest. 
In  general  it  relied  for  its  expansion  upon 
commercial  shrewdness  backing  a  superior 
industrial  technique.  It  submitted  to  se- 
rious economic  checks  in  Morocco,  at  Bag- 
dad and  elsewhere,  rather  than  resort  to 
war.  Nevertheless  the  German  Empire  of 
yesterday  was  a  huge  economic  monopoly. 
Its  spirit  was  grasping  and  exclusive.  It 
paid  little  heed  to  the  interests  of  civiliza- 
tion at  large.  It  turned  the  whole  force  of 
concentrated  will  and  organized  intelli- 
gence to  the  problem  of  making  Germany 
rich,  without  any  scruple  about  the  wealth 
of  Europe  or  the  general  advantage  of  man- 
kind. 


134         THE  GREAT  NEWS 

In  Great  Britain  and  France,  on  the 
other  hand,  the  process  of  trustification  was 
subtle  and  unavowed.  Trade  monopolies 
rested  more  upon  custom  and  inertia  than 
upon  any  positive  conspiracy  or  high-hand- 
edness. Certainly  they  had  no  governmen- 
tal sanction,  no  popular  support,  no  shelter 
of  statute  law.  Yet  there  was  wrought  out 
in  each  of  these  countries  a  "money  trust," 
or  concentration  of  arbitrary  credit  power 
— not  by  conspiracy,  but  by  class-instinct — 
that  had  no  parallel  elsewhere  in  the  world. 
The  banking-systems  of  Britain  and  France 
stood  in  contrast  to  the  social  intelligence 
and  constructive  enterprise  of  the  German 
system.  In  France  and  Great  Britain  there 
was  little  financial  patriotism.  The  indus- 
trial rise  of  Germany  was  accompanied  by 
an  industrial  decline  on  both  sides  of  the 
English  Channel.  The  banks  of  London 
and  Paris  did  little  to  prevent  the  deca- 
dence of  British  and  French  enterprise  and 
technical  art.  They  did  much  that  accele- 
rated the  process.  They  diverted  the  work- 


THE  EUROPEAN  TRAGEDY  135 

ing  capital  of  their  own  countries  to  far- 
off  investments.  England  which  had  led 
the  world  in  industrial  technology,  lost  that 
leadership  beyond  recall.  The  deterioration 
in  its  industrial  life  was  accompanied  by  a 
dreary  depopulation  of  its  country-side. 
The  British  became  the  world's  great 
creditor  nation.  British  capitalists  drew 
tribute  from  overseas  that  dwarfed  the  pro- 
consular revenues  of  ancient  Rome.  Their 
annual  income  from  investments  outside  the 
British  islands  was  seven  times  as  much  as 
the  profits  of  British  commerce  with  other 
lands.  Yet  nowhere  was  there  deeper  or 
more  desperate  poverty  than  in  Great 
Britain. 

In  Great  Britain  and  France  the  pur- 
chasing-power of  a  day's  work  had  steadily 
declined  since  the  beginning  of  the  century. 
How  could  it  be  otherwise?  The  central 
economic  power,  the  power  of  the  banks, 
had  been  assiduously  spent  for  two  or  three 
decades,  not  in  the  development  of  the  ma- 
terial and  mental  resources  of  England  and 


136         THE  GREAT  NEWS 

France,  but  in  the  nourishing  of  what  the 
law  of  England  rightly  calls,  "unearned  in- 
comes." 

Particularly  it  is  to  be  noted  that  British 
and  French  gold  was  poured  into  Russian 
business  and  the  treasury  of  the  Russian 
state.  Russia  is  a  country  in  which  eco- 
nomic privilege  needs  no  cloak.  The  Rus- 
sian State  is  a  politico-economic  trust  sup- 
ported by  emotional  and  conscientious  sanc- 
tions. 

With  the  arbitrary  credit-power  of  St. 
Petersburg — a  power  derived  not  from  ne- 
gotiable securities,  but  from  the  holy  chrism 
of  the  Czar's  coronation — the  credit  powers 
of  London  and  Paris,  equally  arbitrary  but 
less  secure,  struck  hands  in  a  community 
of  interest  that  was  syndicated  under  the 
name  of  the  Triple  Entente. 

We  have  been  living  under  the  illusion 
that  social  questions  were  merely  questions 
of  improvement,  that  at  the  worst  the  ex- 


THE  EUROPEAN  TRAGEDY  137 

isting  social  fabric  would  stand — and  wait 
to  be  improved.  We  may  perceive  now  that 
there  are  social  questions  that  cannot  be 
postponed — that  social  wrongs,  when  they 
go  deep  enough,  are  mortal.  The  fabric  of 
society  dissolves  under  one's  feet. 


VI 

CONTROL  OF  WORKING  FORCES 


is  a  bank  on  upper  Fifth  Ave- 
•1       nue  in  New  York  that  fronts  the 
street  with  the  conspicuous  legend:     "De- 
pository of  the  United  States,  of  New  York 
State  and  of  the  City  of  New  York." 

That  sign  serves  as  a  convenient  symbol 
of  the  fact  that  banks  are  still  supposed  by 
simple  folk  to  be  just  places  where  people 
put  their  savings.  Even  governments  and 
political  constituencies  have  not  yet  learned 
that  great  commercial  institutions  (such  as 
the  bank  that  bears  this  sign)  are  not  so 
much  store-houses  of  public  money,  as  pow- 
er-houses for  directing  and  controlling  the 
working-energies  of  this  age  of  great  com- 
binations —  an  age  in  which  nobody  can  work 
without  associating  his  skill  and  knowledge 

133 


WORKING  FORCE  CONTROL    139 

with  the  skill  and  knowledge  of  many  other 
men — through  the  bank. 

It  is  not  a  question  of  money — or  even  of 
tools.  For  if  the  whole  material  apparatus 
of  our  civilization  were  swept  away  by  some 
unimaginable  disaster,  it  would  be  found  on 
the  day  after  the  deluge,  that  the  artists, 
artisans  and  engineers  would  resort  to  the 
banker — as  minister  and  preserver  of  legal 
obligations — for  means  of  correlating  their 
productive  abilities,  to  make  a  new  start  in 
life. 

Thus  the  credit-power  is  only  incidental- 
ly concerned  with  material  goods  saved  out 
of  past  labor.  Its  predominant  and  all- 
important  office  is  to  conserve  and  co-or- 
dinate the  incorporeal  hereditaments  of  the 
race — the  artistic  and  scientific  abilities  by 
means  of  which  the  material  fabric  of  civili- 
zation is  daily  and  hourly  renewed. 

That  modern  finance  is  not,  in  the  main, 
an  economy  of  "savings"  could  be  shown 
objectively  on  a  great  scale  by  a  study  of 


140         THE  GREAT  NEWS 

the  phenomena  of  the  export  of  capital — 
the  processes  of  money-lending  across  na- 
tional frontiers.  It  appears,  for  example, 
that  ever  since  the  Napoleonic  wars  Great 
Britain  has  been  exporting  capital  and  the 
United  States  has  been  importing  it.  It  is 
impossible  to  believe  that  the  United  States 
really  borrowed  tangible  goods  from  Eu- 
rope to  the  amount  of  its  indebtedness  to 
Europe,  or  that  Great  Britain,  with  its  de- 
clining powers  of  production,  has  been  send- 
ing commodities  abroad  in  excess  of  its  im- 
ports, to  anything  like  the  amount  of  its 
immense  foreign  loans.  The  fact  is  that 
during  the  last  few  years  British  imports 
have  exceeded  exports  by  about  a  hun- 
dred and  fifty  million  pounds  a  year;  while 
at  the  same  time — marvellous  to  tell! — 
British  foreign  loans  were  increased  by 
about  a  hundred  and  fifty  million  pounds 
in  1911,  a  hundred  and  seventy-five  mil- 
lions in  1912  and  two  hundred  millions  in 
1913. 

No,  Great  Britain  became  universal  cred- 


CORKING  FORCE  CONTROL    141 

itor  and  won  her  immeasurable  annuity  from 
the  working-world — by  capitalizing  the  civil 
security  of  her  social  structure  and  her  com- 
mand of  the  ocean-roads.  Thus  it  is  pos- 
sible to  imagine  that  a  strong  and  secure 
country,  among  weak  and  insecure  coun- 
tries, could  become  universal  banker  and 
universal  creditor — without  doing  any  pro- 
ductive work  at  all. 

When  one  considers  how  the  administra- 
tors of  credit  and  general  finance  are  able  to 
capitalize  and  set  over  to  their  own  account 
the  gains  and  honors  of  law  and  order,  it  be- 
comes evident  that  in  any  community  where 
the  credit-power  is  exercised  only  in  the  in- 
terest of  an  investing  or  creditor  class,  it 
must  be  impossible  that  the  law  should  not 
be  executed  with  a  bias  in  favor  of  that  class. 
In  a  society  of  padrones  and  peons  it  is  idle 
to  talk  of  equality  before  the  law.  By  the 
same  token  it  should  be  evident  that  a  cred- 
itor-nation among  debtor-nations  will  dic- 
tate the  terms  of  international  law,  until  the 
day  that  its  credit-structure  falls. 


142          THE  GREAT  NEWS 

The  strength  of  creditor-nations  is  merely 
specious.  No  nation  that  lives  upon  un- 
earned incomes  can  be  other  than  weak  at 
the  vitals.  England  at  the  date  of  this  writ- 
ing has  virtually  confessed  that  she  cannot 
go  on  with  the  war  to  the  spring  of  1916, 
unless  she  can  borrow,  without  present  abil- 
ity to  pay  for  it,  the  use  of  the  industrial  sys- 
tem of  the  United  States.  On  the  day  that 
the  Lord  Chief  Justice  of  England  with  his 
suite  of  financiers  lands  in  New  York  on  this 
errand,  Mr.  Lloyd  George  declares  with 
passionate  frankness  to  a  labor  union  con- 
gress at  Bristol  that  the  war  is  at  bottom 
not  a  conflict  of  soldiers  but  of  mechanics. 
Thus  it  is  the  American  mechanic  that  must 
shore  up,  for  a  little  space,  the  tottering 
tower  of  British  finance.  All  of  which  goes 
to  show  that  England  has  not  "saved"  so 
much  money  as  was  supposed. 

Every  advance  in  art  and  science  tends  to 
eliminate  time  and  labor  from  the  produc- 
tive process.  It  is  conceivable  that  time  and 


WORKING  FORCE  CONTROL    143 

labor  could  be  so  far  eliminated  that  all  the 
material  goods — food,  clothes,  housing, 
transportation — necessary  or  convenient  for 
the  maintenance  of  high  civilization,  might 
be  produced  easily  within  the  space  of  a 
single  year.  It  would  then  become  obvious 
that  the  social  structure  itself  is  the  pre- 
dominant factor  in  economics,  that  com- 
modities are  mere  emanations  from  the  pow- 
er of  the  social  organism,  that  the  commu- 
nity is  really  capitalist  in  chief,  and  that  the 
administration  of  credits  is  a  social  func- 
tion whereby  each  undertaker  of  enterprise 
is  empowered  to  wield  an  economic  force 
proportioned  to  his  proved  ability  and  to 
the  magnitude  of  the  social  task.  If  we  sup- 
pose that  these  four  staples  of  the  economic 
fabric — food,  clothes,  housing  and  transpor- 
tation— make  equal  demands  upon  social 
strength,  they  would  require  equal  credits; 
and  these  credits  would  be  used  up  pari 
passu  through  the  year  and  the  accounts 
cleared  against  one  another,  without  any 
considerable  amount  of  initial  capital. 


THE  GREAT  NEWS 

Now  this  imaginary  foreshortening  of  the 
period  and  effort  required  to  create  the  es- 
sentials of  civilization  does  not  alter  the 
principles  involved  in  our  actual  social  state. 
It  only  makes  plainer  what  is  now  obscured 
— to  wit,  the  fact  that  capital  has  already 
ceased  to  be  in  the  main  savings  or  accumw- 
lated  commodities  and  has  become  mainly 
social  credit. 

Our  actual  business  system  is  blind  to  the 
truth  that  the  organization  of  intelligence 
and  morals — the  civil  community — is  the 
principal  agent  of  production ;  although  that 
truth  has  been  sharply  emphasized  by  the 
modern  grand-scale  development  of  public 
education — with  its  plain  implication  that 
the  racial  inheritance  of  science  and  art  is 
common  property,  and  that  this  kind  of 
property  is  more  precious  than  any  other 
kind. 

A  world-wide  business  system  has  been 
built  up  on  a  false  basis.  This  system  has 
been  supposed  to  have  an  existence  inde- 


WORKING  FORCE  CONTROL    145 

pendent  of  civil  society.  Capital,  credit,  con- 
tract and  corporate  organization  have  been 
conceived  of  as  if  they  were  facts  of  nature 
— like  the  laws  of  chemistry  and  physics. 
This  idealistic  abstraction  of  business  has 
not  enabled  business  men  to  wholly  disre- 
gard the  state — as  has  been  shown.  Its 
practical  effect  has  been  to  degrade  the  state 
and  to  subject  it  to  a  degraded  business  sys- 
tem. The  public  and  political  organization 
of  science  and  art  has  been  thrown  upon  the 
market.  Its  gains  and  honors  have  been 
made  a  prize  to  be  gambled  for.  The  con- 
trol of  the  police  power  has  fallen  into  the 
hands  of  the  masters  of  finance  and  the 
owners  of  the  organs  of  information. 

Germany  has  had  a  more  humane  work- 
ing organization  than  France  or  Great 
Britain  because,  under  the  rule  of  an  un- 
social business  system,  political  feudalism 
is  more  benign  than  political  liberalism. 

Liberalism,  now-a-days  since  the  rise  of 
the  credit  power  with  its  control  of  the 


146         THE  GREAT  NEWS 

press,  is  a  spent  force.  It  is  powerless  to 
resist  the  encroachments  of  monopoly  from 
any  quarter.  In  spite  of  certain  current 
sentimentalities  to  the  contrary,  it  really  is 
better  that  the  intangible  goods  of  a  people 
— the  common  heritage  of  art  and  knowl- 
edge— should  be  guarded  by  a  public-mind- 
ed autocracy  than  by  a  private-minded 
oligarchy. 

The  socialists  demand  "public  ownership 
of  the  means  of  production."  They  mean 
land  and  tools.  They  fail  to  understand 
that  the  power  of  exploitation  does  not  rest 
in  the  possession  of  land  and  tools,  but  in 
a  monopoly  of  the  means  of  getting  people 
to  work  effectively  together,  which  is  in 
truth  a  monopoly  of  the  thing  that  is  the 
quintessence  of  civilization.  For  civilization 
is  at  bottom  nothing  but  a  sensitive  under- 
standing and  correspondence  among  a 
number  of  persons  whereby  they  are  able 
to  "pool"  their  several  kinds  of  knowledge 
and  skill,  of  art  and  science,  in  accordance 
with  some  practicable  scale  of  relative  com- 


WORKING  FORCE  CONTROL    147 

petency.  This  team-play  of  civilization  is 
the  source  of  political  power,  since  it  is  the 
source  of  the  power  to  build  cities  by  means 
of  tools  or  to  destroy  them  by  force  of  arms. 
The  sovereignty  lies  in  the  control  of  this 
team-play. 

Those  who  have  in  their  hands  the  means 
of  combining  (or  disintegrating)  the  skill 
and  knowledge  of  populations,  do  not  need 
any  other  means  of  political  or  social  con- 
trol. They  do  not  need  to  hold  political 
or  military  offices.  They  do  not  need  the 
titular  proprietorship  of  land,  tools  or  any 
kind  of  tangible  capital. 

Now  the  means  whereby  these  social  com- 
binations are  actually  effected  in  the  United 
States  are  the  agencies  of  credit-adminis- 
tration and  the  news-service — the  bank  and 
the  press.  These  constitute  a  fairly  coher- 
ent though  imperfectly  consolidated  power 
which  easily  subordinates  the  church,  the 
school  and  the  political  machine. 

Hard  times  and  the  social  problem  are 
caused — as  has  been  said — by  an  impulse  of 


148         THE  GREAT  NEWS 

self-protection  on  the  part  of  the  investing 
class  who  instinctively  inhibit  all  enterprises 
save  the  kind  that  obviously  inure  to  their 
group  advantage — as  mortgagees  of  the  gen- 
eral industrial  plant.  There  is  no  conspiracy 
and  no  need  of  conspiring.  There  was  no 
need  of  conspiracy  among  Pilate,  Herod  and 
Caiaphas — nor  any  very  high  intelligence. 

Not  much  is  to  be  got  at  this  juncture  by 
agitating  for  new  laws.  It  should  be  frank- 
ly admitted  that  our  present  legal  system  is 
fairly  expressive  of  that  degree  of  popular 
right  that  can  be  enforced.  If  the  law  were 
made  more  human,  more  democratic,  it 
would  remain  a  dead  letter. 

The  law  is  enforceable  only  by  economic 
power.  Economic  power  in  the  last  analysis 
is  power  to  bring  people  together  for  pro- 
ductive operations — or  to  keep  them  from 
coming  together. 

As  things  stand  this  power  has  been  for 
the  most  part  concentrated  in  a  few  hands. 
Thus  the  enforcement  of  law  is  in  the  hands 


WORKING  FORCE  CONTROL 

of  a  few.  There  is  no  way  of  changing  the 
enforceable  laws  save  by  the  transference 
of  economic  power. 

This  is  not  so  difficult  as  it  seems — since 
every  person  who  is  able  to  live  at  all  has 
within  his  own  control  a  certain  amount  of 
economic  power.  Everybody  can  in  some 
degree  influence  productive  combinations. 

It  is  possible  in  any  community  for  a  doz- 
en or  a  hundred  persons  to  associate  them- 
selves in  an  economic  combination  that 
would  be  very  formidable  to  monopolists. 
And  if  the  members  of  such  a  combination 
were  really  determined  to  get  rich  only  by 
enriching  the  community,  they  would  soon 
draw  to  their  aid  all  the  sincere  and  capable 
men  of  the  neighborhood.  They  would  be 
able  to  establish  a  permanent  political  pri- 
mary and  to  effect  a  transference  of  eco- 
nomic power. 

The  new  distribution  of  economic  power 
requires  merely  that  people  shall  assemble 
the  weight  of  their  several  actual  estates 
on  a  basis  of  real  interest,  and  without  af- 


150         THE  GREAT  NEWS 

fectation  of  social  sacrifice;  that  they  shall 
cease  and  refuse  to  keep  their  social  and 
spiritual  interests  separate  from  their  mate- 
rial and  economic  interests,  that  they  shall 
come  to  understand  that  all  really  signifi- 
cant spiritual  values  can  be  and  ought  to  be 
expressed  in  material  terms.  And  that  they 
shall  thus  free  themselves  from  the  rule  of 
an  abstract  and  merely  documentary  money 
power  which  nearly  everybody — including 
many  of  those  that  wield  it  —  secretly 
hates. 

The  refusal  to  believe  that  public  spirit 
or  any  human  motive  except  gain  has  an  in- 
trinsic relation  to  the  productive  process, 
is  the  peculiar  ineptitude  of  western  demo- 
cratic countries  that  have  been  historically 
possessed  by  the  idea  of  the  inhibitive  state 
— the  idea  that  the  public  power  exists  mere- 
ly to  keep  people  from  doing  wrong  or  to 
punish  them  if  they  do  wrong.  Thus  all 
the  idealizing  faculties  are  cut  loose  from 
the  realizing  faculties.  Human  nature  is 
maimed. 


WORKING  FORCE  CONTROL    151 

To  a  consistent  psychology  or  sociology  it 
should  be  plain  that  an  economic  system, 
voided  of  ideal  and  social  motives,  must  in- 
evitably split  in  two.  The  socialists  are 
right  in  their  notation  of  a  class-schism. 
They  do  well  to  point  out  the  reality  of  an 
opposition  of  interests  between  those  who 
are  paid  for  owning  things  and  those  who 
are  paid  for  doing  things.  But  the  social- 
ists are  wrong  in  supposing  that  they  can 
heal  the  schism  by  extending  the  sphere  of 
ownership — making  ownership  political  and 
universal.  Nature  is  too  urgent  for  that, 
the  difficulties  of  existence  are  too  real. 

Ownership  is  not  power.  The  existing 
power  of  misrule  does  not  lie  in  ownership. 
It  lies  in  the  control  of  enterprise  through 
mastery  of  news  and  credit,  i.e.,  not  in  the 
direct  control  of  things,  but  in  the  direct 
control  of  the  power  to  make  things — the 
power  to  co-ordinate  working  forces.  Thus 
the  New  Haven  Railroad  is  controlled  by 
the  Morgan  bank,  though  the  bank  is  said 
to  hold  less  than  one  per  cent  of  the  capital 


152         THE  GREAT  NEWS 

stock.  Mr.  Rockefeller  controls  the  Colo- 
rado Fuel  &  Iron  Company  and  affiliated 
concerns — without  majority  stock-owner- 
ship, and  so  on. 

As  things  stand  in  the  realm  of  business 
it  is  considered  un-male  to  have  or  profess 
any  other  aim  than  acquisitiveness.  In  the 
realm  of  government  or  civil  service,  ac- 
quisitiveness is  regarded  as  an  almost  com- 
plete disqualification.  Certainly  the  open 
profession  of  that  motive  is  completely  dis- 
qualifying. Thus  the  public  service  is  full 
of  an  hypocrisy  of  altruism,  and  private 
business  is  full  of  an  hypocrisy  of  egotism. 
These  mental  poses  are  equally  unpractical. 

It  is  natural  for  men  to  be  altruistic  and 
egotistic  at  the  same  moment  and  in  the 
same  deed.  And  the  individual  in  whom  the 
two  motives  are  most  perfectly  amalgamated 
and  indistinguishable  is  the  sanest. 

The  corruption  of  politics  is  largely  due 
to  its  monstrous  pretense  of  perfect  altru- 
ism, its  theory  that  a  governor  or  a  judge 


must  have  two  minds — a  private  mind  and 
a  public  mind — that  only  in  moments  of  rest 
and  relaxation  is  he  entitled  to  the  exercise 
and  enjoyment  of  his  characteristic 
thoughts  and  emotions.  On  the  other 
hand,  the  unpractically  of  business — its 
failure  to  feed,  clothe  and  house  people  with 
an  efficiency  proportionate  to  the  skill  of 
modern  men  and  the  excellence  of  modern 
tools — is  largely  due  to  its  unnatural  af- 
fectation of  pure  selfishness,  its  inherited 
theory  that  a  good  business  man  must  be 
two  men,  that  in  office  hours  he  must  be  per- 
fectly unconcerned  about  the  happiness  of 
other  human  beings  and  that  he  must  be 
"good"  to  his  family,  his  friends  and  the 
community  at  all  other  times. 

Nothing  can  prevent  the  growth  of  mo- 
nopoly, the  eclipse  of  prosperity  and  the 
subsidence  of  liberty  in  the  United  States, 
save  the  rise  of  a  political  party  that  is 
businesslike  and  practical,  or  (what  amounts 
to  the  same  thing)  the  development  of  com- 


154          THE  GREAT  NEWS 

manding  organs  of  business  that  are  actuat- 
ed by  public  and  civilizing  motives. 

A  peace  ruled  by  duplicities  has  produced 
war.  The  war  is  a  test  of  the  realism  of 
modern  nations — a  purge  of  national  cant 
and  political  phrase-making,  a  drastic  dis- 
solvent of  all  merely  documentary  rela- 
tionships, a  destroyer  of  factitious  finance,  a 
restorer  of  the  validities  and  virilities  of 
economics.  War  is  a  horrible  fever;  but  it 
burns  up  morbid  tissues.  The  nations  that 
undergo  the  severest  discipline  of  this  ex- 
perience may  emerge  as  the  strongest  na- 
tions. There  is  danger  that  the  United 
States,  for  lack  of  a  fire-and-acid  test,  may 
come  out  weakest. 

If  the  United  States  is  to  preserve  even 
its  former  relative  strength  it  must  subject 
itself  to  a  political  and  economic  discipline 
— must  swiftly  develop  a  more  practical 
politics,  a  more  productive  credit  system,  a 
more  veracious  news-service.  Thus  rapidly 
must  we  run — if  we  are  to  stay  where  we 
are.  We  must  run  much  faster  than  that, 


[WORKING  FORCE  CONTROL    155 

must  overthrow  the  rule  of  jobbers  and 
speculators  and  produce  a  real  democracy, 
a  rule  of  the  servants — if  we  are  to  get  for- 
ward and  make  terms  of  peace  for  the  rest 
of  the  world. 

The  sickest  nation  is  not  that  in  whicE 
men  have  the  hardest  hearts  and  commit  the 
most  ruthless  deeds.  The  sickest  nation  is 
the  nation  in  which  great  cruelties  have  be- 
come wholly  impersonal,  chargeable  to  no 
man — in  which  such  cruelties  are  accompa- 
nied with  an  exquisite  sentimentalism  and  an 
immense  outpouring  of  charity,  and  in  which 
the  responsibility  of  individuals  has  every- 
where given  place  to  a  worship  of  natural 
forces,  to  a  reverence  for  legal  abstractions, 
to  religious  faithlessness,  a  fainting  sense  of 
personal  existence  and  an  overmastering 
sentiment  of  fate. 


VII 

TEANSPLACEMENT  OF  THE  CENTRE  OF 
SOCIAL  CREDIT 

TO  find  a  form  of  government  that  will 
not  repress  the  practical  arts — that 
is  the  gist  of  the  social  problem.  It  always 
has  been  so. 

The  life  of  a  personality  upon  this  planet 
is  not  a  matter  of  nature,  but  of  art.  And 
a  society  of  personalities  can  be  maintained 
only  by  a  continual  tension  of  the  human 
spirit,  drawing  against  the  drift  of  blind 
forces. 

As  a  matter  of  history,  it  has  been  very 
difficult  to  find  a  mode  of  government  favor- 
able to  the  development  of  the  practical  arts. 
The  development  of  the  practical  arts  re- 
quires a  co-ordination  of  many  persons  in  a 
spirit  of  devotion  to  the  realities  that  con- 
dition health  and  welfare,  in  face  of  the 

156 


CENTRE  OF  SOCIAL  CREDIT   157 

enormous  difficulties  -of  existence.  It  re- 
quires such  gallantry  of  devotion  that  each 
man  in  an  emergency  must  prefer  to  deliver 
the  goods  of  life  without  reward,  rather  than 
take  the  reward  without  the  delivery. 

To  be  sure  such  devotion  is  not  at  all 
above  the  level  of  common  human  nature. 
It  has  been  exemplified,  after  a  fashion,  by 
a  majority  in  all  nations  and  at  all  times; 
and  it  is  to  be  observed  every  day  among 
miners,  engine-men,  chauffeurs,  physicians, 
and  so  on. 

It  appears  that  the  human  race  is  set 
apart  from  all  sub-human  races  in  the  bio- 
logic scale,  simply  by  its  awful  faculty  of 
imagination.  There  is  nothing  the  matter 
with  the  race  except  its  misuse  of  the  power 
to  conceive  things  that  do  not  exist.  The 
race  does  not  need  wings  in  order  to  be 
glorious.  It  has  always  been  glorious, 
whenever  the  imagination  has  been  turned 
earthward,  to  invest  with  splendor  houses, 
lands,  engines,  bread  and  wine. 


158         THE  GREAT  NEWS 

It  appears  further,  that  the  Authorities  of 
the  universe  are  not  able,  or  not  willing  to 
dispense  us  from  the  dreadful  peril  of  the 
misuse  of  this  conceptive  power.  We  have 
to  take  the  risks  and  make  our  own  choice. 
It  is  open  to  us  to  pass  from  the  status  of 
creaturehood  to  that  of  creatorship,  by  tak- 
ing this  power  to  conceive  the  non-existent 
and  using  it  to  make  new  things  exist.  That 
seems  to  be  the  normal  process.  Men  can 
be  made  sane  and  intelligible  to  one  another 
and  can  make  themselves  at  home  in  the 
material  world,  by  investing  their  concep- 
tive faculties  in  the  business  of  building 
cities  and  subduing  the  land  and  sea. 

But  the  mass  of  men  have  never  had  the 
courage — the  faith,  if  you  please — to  do 
this  with  any  steadiness  of  purpose.  Most- 
ly they  have  used  the  imagination,  not  to 
master  the  realities  of  the  world,  but  to  es- 
cape from  them.  Thus  it  has  been  difficult 
to  establish  the  social  and  political  correla- 
tions necessary  for  the  advancement  of  the 
practical  arts. 


CENTRE  OF  SOCIAL  CREDIT    159 

The  historic  races  have  mostly  refused  to 
be  romantic  about  real  things,  and  have 
spent  the  heart-rending  energy  of  their 
idealism  in  the  quest  of  holy  grails  and  gold- 
en-fleeces, and  in  the  defence  of  platonic  and 
Utopian  sovereignties  of  state. 

One  might  generalize  the  history  of  sov- 
ereign states  by  showing  that,  in  each  par- 
ticular case,  there  has  been  some  sort  of  an 
organization  for  the  improvement  of  the 
practical  arts;  but  that  this  organization 
has  always  been  weaker  than  another  or- 
ganization within  the  political  body  that  has 
drawn  steadily  in  an  opposite  direction. 
And  the  latter  has  at  length  reduced  the 
former  to  such  feebleness  that  the  state 
could  not  live  in  peace,  and  was  obliged  to 
hazard  its  chances  of  recuperation  or  de- 
struction, in  war. 

The  operation  of  these  two  polarities 
within  the  body  of  the  historical  state,  may 
be  understood  by  regarding  each  of  them 
as  a  credit-centre,  or  a  clearing-house  of  so- 
cial appreciation  and  emolument.  To  the 


160         THE  GREAT  NEWS 

extent  that  the  individual  is  assured  of  hon- 
or and  reward  for  contributions  to  the  prac- 
tical arts,  society  is  strong  and  sane  for 
progressive  peace  or  defensive  war.  But 
the  actual  state  of  history  has  usually  been 
dominated  from  a  credit-centre  offering  the 
highest  honor  and  reward  on  quite  other 
terms. 

Generally  the  state  has  been  devoted  to 
slow  or  swift  suicide  by  the  very  terms  of 
its  legal  constitution.  For  generally  the 
law  has  not  protected  the  artists  and  earth- 
wrestlers  half  so  well  as  it  has  protected 
those  who  had  claims  against  them.  Thus 
society  has  destroyed  its  own  livelihood.  To 
fix  the  legal  conditions  of  honor  and  income 
in  a  manner  that  runs  counter  to  the  outdoor 
conditions  of  the  earth-struggle,  subverts  the 
working  establishment  by  which  we  live. 

It  is  obvious  that  a  country  with  a  legal 
credit-centre  that  offers  the  highest  social 
promotion  and  career  to  mandarins  who  are 
merely  erudite  or  accurate  in  letters,  is  like- 


CENTRE  OF  SOCIAL  CREDIT   161 

ly  to  be  as  feeble  as  China  is.  A  state  in 
which  lawyers  or  priests  are  raised  to  the 
highest  places,  solely  because  of  their  abil- 
ity to  maintain  a  logical  theory  of  legality 
or  divinity,  cannot  possibly  be  strong.  A 
state  that  makes  the  whim  of  a  prince  the 
chief  fountain  of  honor  and  profit,  will  find 
that  its  tools  drift  into  the  hands  of  men  that 
cannot  use  them.  And  a  legal  system  that 
is  perfect  for  the  maintenance  of  claims 
against  its  general  industrial  plant,  but  in- 
different about  the  maintenance  of  the  plant 
— will  surely  wither  on  contact  with  any 
rival  system  that  reverses  those  terms. 

The  summation  of  all  the  varied  suicidal 
ways  of  administering  credit  is  reached  when 
one  understands  that  this  wistful,  yearning, 
visionary  race  of  ours — with  its  fixed  reluc- 
tance to  idealize  anything  that  it  can  see 
or  handle — has  always  loved  fine  words  and 
logical  formulas  much  more  than  it  has  loved 
good  work.  Therefore  it  has  generally 
erected  its  rigid  systems  of  law  on  some 
Utopian  notion  of  perfect  justice,  fraternal 


162          THE  GREAT  NEWS 

liberty  or  divine  authority,  and  has  offered 
its  social  dignities  and  its  great  incomes 
either  to  charlatans,  or  else  to  persons  rapt 
and  simple  enough  to  take  the  Utopia  for 
a  fact, — and  skilful  with  words  to  fortify 
the  people  in  their  fond  illusion. 

The  mass  of  mankind  has  always  been 
ready  to  crucify  the  Man  that  stood  for  the 
fine  Thing,  against  the  fine  Word.  But 
afterwards,  and  in  proof  of  its  faithless  sin- 
cerity, the  crowd  has  flung  itself  to  death  on 
battlefields,  for  the  Word. 

Through  most  of  our  racial  experience  in 
politics  the  centre  of  social  credit  for  serv- 
ice in  the  arts,  has  stood  over  against  and 
has  been  quite  distinct  from  the  credit-cen- 
tre that  has  dispensed  honors  and  incomes 
for  conformity  to  some  abstract  and  ideal 
standard  of  social  worth. 

But  the  characteristic  and  crucial  fact  of 
our  own  time  is  that  the  two  centres  tend  to 
coalescence  in  the  modern  circle  of  industry 
and  commerce  whose  vortex  is  the  Bank. 

This  coalescence  puts  the  ancient  political 


CENTRE  OF  SOCIAL  CREDIT    163 

issue  in  a  new  and  unfamiliar  shape.  The 
sphinx  riddle — which  men  must  answer  or 
be  eaten — is  now  posed  with  singular  poig- 
nancy. 

The  bank  as  credit-centre  is  the  most  sub- 
tle and  powerful  organ  of  social  control  that 
has  yet  appeared  within  the  universal  field 
of  politics.  A  way  has  here  been  found 
whereby  a  single  central  organ  can  deter- 
mine the  general  direction  of  enterprise  and 
administer  the  artistic  and  scientific  abili- 
ties of  a  community.  It  can  dispose  not 
only  of  actual  values  but  also  of  potential 
values.  It  can  command  time-distance  as 
railroads  and  telegraphs  command  space- 
distance.  The  bulk  of  its  transactions  are 
actuarial  and  prophetic.  It  reaches  forward 
and  handles  the  stuff  of  the  future. 

We  have  been  slow  to  perceive  that  this 
wonderful  modern  organ  of  credit  is  neces- 
sarily political,  because  it  has  come  gradual- 
ly to  the  exercise  of  its  central  social  func- 
tion and  has  been  developed  out  of  an  organ 


164,         THE  GREAT  NEWS 

or  agency  that  in  its  origin  was  not  socially 
vital.  The  banking  business — as  has  been 
said — grew  up  from  the  business  of  chang- 
ing money  or  from  the  craft  of  goldsmiths. 
It  has  developed  into  an  organ  of  social  con- 
trol by  long  processes.  These  processes 
may  well  be  compared  with  those  by  which 
law-courts,  legislatures  and  executive  offices 
have  developed  out  of  the  casual  improvisa- 
tions of  umpires,  counsellors  and  captains 
in  primitive  society. 

A  similar  account  should  be  given  of  the 
evolution  of  the  press  or  the  organization 
of  news.  The  news-service,  like  the  credit- 
service,  is  a  governmental  power.  Both 
tend  toward  complete  monopoly — not  in- 
deed by  any  law  of  physical  nature,  but  by 
that  law  of  the  human  mind  which  demands 
unity  in  essentials.  But  the  news-service  is, 
for  the  present  at  least,  subordinate  to  the 
credit-service  and  practically  concentric 
with  it.  Therefore  a  sufficient  understand- 
ing of  this  phase  of  the  new  politics  may 
be  got  from  a  study  of  the  bank. 


CENTRE  OF  SOCIAL  CREDIT   165 

An  adequate  study  of  the  modern  politi- 
cal organ  that  has  grown  out  of  the  ancient 
business  of  exchanging  and  storing  money, 
must  soon  be  undertaken.  It  is  intended 
here  to  indicate  merely  the  general  lines  of 
such  a  discussion.  The  orthodox  writers 
on  the  subject  usually  assume  that  bank- 
ing is  mainly  a  matter  of  transferring 
money  and  claims  upon  capital,  in  accord- 
ance with  some  natural  law  of  supply  and 
demand  that  the  banker  cannot  alter  and 
can  only  obey.  The  truth  is  that  the  mod- 
ern commercial  and  financial  bank  makes  a 
diminishing  use  of  money,  concerns  itself 
much  more  with  the  administration  of  credit 
than  of  capital,  and  determines  with  in- 
creasing freedom  the  direction  of  enterprise. 

As  for  the  use  of  money  the  fact  is,  as 
Lord  Farrer  says  in  his  "Studies  of  Cur- 
rency": "We  are  returning  to  a  state  of 
barter  in  which  money  is  merely  the  meas- 
ure and  language,  not  the  actual  medium, 
of  exchange,  and  in  which  personal  rights 
and  duties  take  the  place  of  cash." 


166         THE  GREAT  NEWS 

As  for  capital,  i.e.,  tools  and  other  ma- 
terials usable  in  the  productive  process — 
we  have  observed  that  the  great  municipal 
and  state  banks,  from  the  twelfth  century- 
onward,  have  been  founded  not  upon  capi- 
tal but  upon  public  debts.  From  the  rise  of 
banks  of  issue  in  the  middle  of  the  seven- 
teenth century,  the  banking  systems  of  the 
world  have  exercised  a  delegated  power  of 
political  sovereignty,  in  that  they  have  is- 
sued what  passes  for  money,  and  thus  have 
levied  forced  loans  upon  the  general  wealth. 
In  England,  the  right  to  levy  these  loans 
was  recognized  in  the  case  of  certain  banks 
as  private  property  and  a  vested  interest  by 
the  Bank  Act  of  1844. 

From  the  second  quarter  of  the  nine- 
teenth century  there  has  been  developed  a 
discount  currency  which,  to  a  far  greater 
extent  than  bank-notes,  puts  the  control  of 
social  wealth  into  the  hands  of  the  banks. 

The  bulk  of  modern  banking  power  has 
developed  since  1876.  In  that  year,  the 


CENTRE  OF  SOCIAL  CREDIT   167 

combined  credits  of  London,  Paris,  Berlin 
and  New  York,  were  less  than  a  billion  dol- 
lars. In  1890  the  banks  of  the  United 
States  alone  had  outstanding  credits  of 
about  five  billion  dollars,  which  increased 
in  a  dozen  years  from  that  time  to  nearly 
fourteen  billions. 

Now  these  rapidly  swelling  bank  credits 
do  not  in  the  main  represent  tangible  capi- 
tal or  saved  money.  They  are  largely  predi- 
cated upon  public  debts,  land  mortgages 
and  corporate  securities.  Loans  on  nego- 
tiable securities  grew  five-fold  in  this  coun- 
try during  the  final  quarter  of  the  last  cen- 
tury. And  during  a  single  year — from 
September  9,  1903,  to  September  6,  1904 — 
loans  of  this  character  by  the  national  banks 
of  New  York  City,  increased  from  391  mil- 
lions to  538  millions.  Even  if  such  corpo- 
rate securities  represented  tangible  capital 
actually  in  use,  it  should  be  obvious  that 
loans  made  on  the  securities  do  not  dupli- 
cate that  capital. 

The  fact  is  that  such  securities  represent 


168         THE  GREAT  NEWS 

a  more  or  less  risky  estimate  of  the  power 
of  corporations  to  yield  incomes,  and  the 
loans  based  on  the  securities  represent  an 
estimate  still  more  venturesome,  of  the 
possible  incomes  that  may  be  derived  from 
productive  powers  that  are,  as  yet,  largely 
latent  in  the  bodies  and  souls  of  men. 

The  modern  credit  system  is  not  so  much 
an  economy  of  physical  capital  as  a  some- 
what orderly  and  methodical  speculation  as 
to  the  possible  yield  of  productive  powers. 

The  system  is  not  to  be  faulted  for  its 
forward  look,  its  outreach  to  the  future. 
Human  life  is  often  at  its  best  when  it  is 
most  venturesome.  The  fundamental  criti- 
cism of  the  system  turns  upon  the  fact  that 
it  piles  up  charges  against  the  working  ap- 
paratus of  society — without  concerning  it- 
self to  maintain  or  improve  the  efficiency 
of  the  plant.  It  takes  little  account  of  the 
relation  of  man  to  nature.  It  takes  little 
account,  therefore,  of  real  capital,  for  real 
capital  is  simply  that  part  of  nature  that  has 


been  affected  by  art  in  such  manner  as  to 
further  the  creative  process. 

The  bank  commands  the  future  by  treat- 
ing the  ability  to  do  a  thing  as  if  it  were  a 
thing  done ;  and  this  way  of  dealing  is  made 
possible  by  social  organization — by  that  cor- 
relation of  productive  powers  that  is  the 
artistic  and  scientific  heritage  of  the  com- 
munity. The  control  of  this  correlation  is 
falling  into  the  hands  of  the  banker.  It 
seems  inevitable  that  this  should  be  so. 
There  should  be  no  question  of  depriving 
the  credit-centres  of  the  power  to  bring  to- 
gether the  artists,  chemists  and  engineers, 
and  to  influence  the  general  direction  of 
their  endeavors.  The  question  is,  How  and 
under  what  sanctions  of  social  accountabil- 
ity shall  this  sovereignty  be  exercised? 

The  orthodox  writers  on  banking  would 
have  us  think  that  the  best  banking-system 
is  that  which  is  least  affected  by  politics. 
Politics  is  an  ambiguous  word;  and  with 
reference  to  some  of  its  meanings,  the  ortho- 


170         THE  GREAT  NEWS 

dox  writers  speak  truly.  But  what  shall 
one  say  of  their  notion  that  a  mechanism 
which  is  confessedly  vital  to  the  community 
— and  the  derangement  of  which,  as  they 
warn  us,  may  utterly  ruin  society — should 
be  submitted  to  the  control  of  men  who,  for 
the  most  part,  do  not  think  of  themselves  as 
other  than  the  protectors  of  group-interests 
and  the  curators  of  personal  fortunes?  Is 
it  not  an  anomaly  that  a  central  social 
function  should  be  administered  for  private 
profit? 

The  discount-rate  is  an  underwriting 
charge; — an  insurance  premium.  If  bank- 
ing were  conducted  in  the  public  interest, 
the  credit-centres  of  rival  communities 
would  compete  sharply  with  one  another  to 
minimize  this  charge. 

To  that  end  they  would  withhold  credit 
from  persons  skilful  only  in  the  acquisi- 
tion of  money  and  titles,  and  would  extend 
it  to  masters  of  materials  and  organizers  of 
creative  enterprise.  They  would  strive  to 


CENTRE  OF  SOCIAL  CREDIT   171 

make  the  volume  of  real  values  as  great  as 
possible,  and  the  volume  of  charges  and 
claims  upon  those  values  as  small  as  pos- 
sible. The  administrators  of  such  credit- 
centres  would  desire  that  the  claims  of  men 
who  live  by  just  owning  things  should  rest 
as  lightly  as  possible  upon  the  tools  and 
materials  of  the  men  who  live  by  creating 
things — in  order  that  the  creative  process 
might  not  be  unnecessarily  impeded,  and  in 
order  that  the  general  standard  of  living  and 
the  purchasing-power  of  a  day's  work  might 
be  raised  to  a  maximum.  With  competition 
of  this  kind  established  between  rival  credit- 
centres,  the  repulsive  and  disheartening  phe- 
nomena of  "the  social  problem"  would  dis- 
appear. 

The  academic  writers  on  finance  insist, 
with  an  obscurantism  like  that  of  some  an- 
cient ecclesiarchs,  that  there  is  no  anomaly 
in  the  abandonment  of  the  material  salva- 
tion of  modern  communities  to  the  adepts 
of  their  peculiar  sect.  They  see  nothing 


172         THE  GREAT  NEWS 

abnormal  in  discount  arrangements  that 
make  the  raising  of  the  rate  a  means  of 
putting  a  dead-stop  to  business,  whenever 
business  shows  a  disposition  to  take  its 
money  out  of  the  bank. 

They  see  no  reason  why  bankers  should 
trouble  themselves  about  the  mobilizing  of 
productive  forces  or  any  of  the  gross  mate- 
rial aspects  of  social  economy.  They  seem 
to  conceive  the  mission  of  the  banks  to  be 
purely  ideal  and  spiritual,  dealing  not  with 
carnal  substances  but  with  symbols  and  ef- 
fluences— and  if  the  substances  do  not  cor- 
respond with  the  symbols,  it  is  arranged 
that  the  substances  shall  make  amends. 

The  point  here  contended  for  is  that  the 
modern  credit-centre  is,  in  its  nature,  a 
thing  of  governmental  character  and  that 
the  public  disorders  of  our  times  are  largely 
due  to  the  fact  that  a  vital  governmental 
function  is  being  performed  without  social 
motive  or  responsibility.  When  the  sophis- 
tications are  cleared  away  it  will  be  seen  by 


everybody  that  the  modern  bank  is  neces- 
sarily political,  that  it  is  an  organ  of  social 
control  as  definitely  as  is  the  police  force. 
It  will  be  seen  that  there  can  be  no  continu- 
ing competition  among  the  banks  of  a  par- 
ticular locality,  that  the  credit-power  tends 
irresistibly  to  nucleate  at  one  point  and  to 
diffuse  its  influence  throughout  the  whole 
community. 

The  business  of  the  bank  is — or  ought  to 
be — the  fixing  of  the  rating  of  every  indi- 
vidual with  reference  to  his  social  serv- 
ices or  his  legitimate  claims  upon  the  com- 
munity. The  bank  intervenes  between  the 
parties  to  most  private  transactions.  It  of- 
fers to  give  a  claim  against  the  public  in 
exchange  for  any  valid  claim  against  a  pri- 
vate person.  It  buys  certificates  of  private 
obligation  and  sells  certificates  of  public  ob- 
ligation. 

The  bank  as  universal  market-man  and 
broker  of  commercial  goods  is  preparing  the 
way  for  an  elimination  of  our  malignant  and 
wasteful  commercial  competition,  in  order 


174         THE  GREAT  NEWS 

that  industrial  competition — rivalry  in  the 
advancement  of  the  productive  arts — may 
become  intense.  Through  the  discounting 
of  commercial  bills  the  bank  now  makes  the 
public  buy  the  goods  from  the  seller  and  sell 
them  to  the  buyer. 

The  public  lays  enormous  riches  in  the 
lap  of  the  bank — loans  that  are  never  paid 
back.  Since  it  is  not  thinkable  that  the  pub- 
lic intends  to  endow  a  privileged  class,  these 
loans  without  time  limit,  i.e.,  the  difference 
between  the  capital  of  a  bank  and  the  mini- 
mum of  its  outstanding  obligations — must 
be  regarded  as  a  donation  in  trust,  to  be 
administered  for  the  benefit  of  the  whole 
people. 

If  the  commercial  bank  were  obliged  peri- 
odically— say  annually — to  redeem  all  its 
bank-notes  and  other  borrowings  from  the 
community,  its  monopoly  of  credit  would 
amount  only  to  a  public  grant  of  interest 
on  these  borrowings;  and  that  advantage 
would  be  offset,  in  part  at  least,  by  the  serv- 


CENTRE  OF  SOCIAL  CREDIT   175 

ice  of  the  bank  as  a  public  agent.  But  since 
a  prosperous  bank  never  settles  with  the 
public,  it  is  impossible  to  regard  the  gen- 
eral minimum  amount  of  its  outstanding 
borrowings  from  the  public,  otherwise  than 
as  a  public  grant  of  that  much  money.  And 
this  grant  must  be  thought  of  as  a  trustee- 
ship, not  merely  because  of  the  face-value  of 
the  donation,  but  more  especially  because 
the  grant — like  a  grant  of  police-power — 
acts  as  a  leverage  upon  the  whole  social 
fortune.  Money  breeds  money,  and  these 
huge  donations  to  the  banking-class  confer 
upon  them  a  mastership  over  the  whole  field 
of  economics. 

We  must  not  suppose  that  improvements 
in  bank-machinery  and  book-keeping  or  any 
public  surveillance  over  these  matters  can 
have  any  considerable  effect  in  the  way  of 
shifting  the  centre  of  gravity  of  our  bank- 
ing-system from  the  holders  of  securities  to 
the  creators  of  the  values  upon  which  securi- 
ties depend. 


176         THE  GREAT  NEWS 

Such  a  transplacement  of  the  credit-cen- 
tre must  he  negotiated  somehow — either 
with  frank  good-will  and  intelligence  or 
through  the  compulsion  that  history  lays 
upon  every  institution  that  is  absurd.  It  is 
absurd  and  socially  suicidal  that  a  conti- 
nental democratic  society  shall  resign  itself 
to  be  administered  solely  for  the  benefit  of 
its  creditors. 

The  new  Federal  Reserve  system  sup- 
plies perfectly  fit  machinery  for  the  work- 
ing of  credit-centres  devoted  not  to  business- 
milking  (if  the  word  may  be  tolerated)  but 
to  business-making — to  a  dead  set  to  pro- 
duce values  and  make  the  wheels  go  'round. 
But  this  excellent  system  can  be  used  with 
equal  facility  for  an  opposite  purpose.  It 
should  be  borne  in  mind  that  the  volume  of 
public  donations  or  unliquidatable  bank- 
borrowings  from  the  community,  increases 
with  every  improvement  in  bank-machinery 
that  widens  the  distance  between  necessary 
reserves  and  the  average  low-level  of  out- 
standing obligations.  The  safer  the  system, 


CENTRE  OF  SOCIAL  CREDIT   177 

the  greater  the  volume  of  never-paid  bank- 
borrowing  from  the  public. 

If  a  bank  system  polarizes  elsewhere  than 
in  the  public  interest,  the  solider  it  is,  the 
more  crushing  is  the  monopoly.  It  is  there- 
fore theoretically  possible  to  turn  the  new 
Federal  Reserve  system  into  a  gigantic  en- 
gine of  social  subjugation. 

All  the  signs  of  these  times  go  to  show 
that  the  chief  issue  of  the  ages — the  contro- 
versy between  the  two  kinds  of  credit-ad- 
ministration— cannot  hang  fire  much  longer. 

The  rise  of  the  modern  business-system 
precipitated  the  issue  in  Europe.  If  the 
banks  of  Western  Europe  had  shown  more 
of  a  talent  for  developing  the  human  and 
material  resources  of  their  own  countries 
and  other  lands,  and  less  of  a  talent  for  pil- 
ing bonds  and  mortgages  upon  a  shrinking 
base  of  values,  they  could  have  established 
a  community  of  interest  across  frontiers — 
and  there  would  have  been  no  war. 

The  war  has  come.    Great  Britain  ancl 


178         THE  GREAT  NEWS 

France  have  been  compelled  to  set  aside 
their  systems  of  banking-for-securities-only, 
and  to  institute  new  systems  in  which  the 
government  and  the  credit-centre  coincide. 
They  are  trying  to  do  their  banking  now 
somewhat  on  the  German  model — not  to 
swell  the  volume  of  securities,  but  of  goods. 

The  rise  of  the  modern  business  system 
is  an  importunate  fact.  It  will  not  be  de- 
nied. It  puts  an  end  to  many  consecrated 
fictions  and  absurdities — not  sparing  the 
orthodox  theory  of  banking.  It  forces  the 
slow-moving  hand  of  history  and  drives  the 
nations  to  a  swift  choice.  They  may  or- 
ganize their  modern  arts  and  engines  spon- 
taneously, in  peace  and  on  a  democratic 
basis.  Or  they  must  do  it  by  force,  in  war, 
and  under  the  eyes  of  emperors  and  dic- 
tators. 


VIII 

UNFITNESS  OF  THE  BUSINESS  SYSTEM  FOR 
PERMANENT  MONOPOLY 

PROFESSOR  SCOTT  NEARING, 
of  the  University  of  Pennsylvania, 
in  his  book  on  "Income,"  says :  "A  student 
of  current  American  economic  facts  is 
forced  to  the  conclusion  that  there  is  only 
one  economic  contrast  that  can  be  made 
clear-cut  and  definite — the  contrast  between 
service  income  and  property  income;  be- 
tween income  secured  as  the  return  for  ef- 
fort and  income  secured  in  return  for  prop- 
erty ownership.  .  .  .  The  line  of  future  con- 
flict is  the  line  that  separates  these  two 
ideas.  .  .  .  Certainly  the  crisis  in  this  con- 
flict has  not  yet  come.  Nevertheless,  one 
who  has  watched  the  developments  of  the 
last  few  years  .  .  .  cannot  help  feeling  that 

179 


180         THE  GREAT  NEWS 

the  United  States  is  moving  toward  the 
crisis  with  breathless  speed." 

He  says,  as  do  all  other  competent  ob- 
servers and  statisticians,  that  the  tax  that 
the  owners  of  property  are  levying  upon  the 
producers  of  goods,  is  steadily  increasing, 
both  actually  and  proportionally;  and  de- 
clares that  "the  student  will  search  in  vain 
through  history  for  a  situation  more  fraught 
with  destructive  possibilities.  The  re- 
cipients of  property  income  and  of  service 
income  face  each  other  and  prepare  for  the 
conflict." 

Mr.  hearing's  book  develops  with  force 
and  light,  the  elements  of  the  social  contra- 
diction that  is  spreading  confusion  through 
the  world.  But  he  does  not  undertake  to 
answer  his  own  riddle.  He  does  not  point 
out  the  fact  that  the  impending  social  dead- 
lock and  destruction  can  be  averted  by  a 
transfer  of  the  credit-centre  from  the  owner- 
ship of  property  to  the  production  of  goods. 
Yet  the  idea  that  social  credits  ought  to  be 
administered  with  primary  consideration  for 


UNFITNESS  OF  SYSTEM    181' 

the  fostering  of  enterprise,  and  with  a 
merely  secondary  consideration  for  the  pro- 
prietary claims  that  have  fastened  upon  en- 
terprises— is  elementary  in  economics; 
though  it  is  nowhere  clearly  stated  in  the 
classic  books  of  political  economy.  It  should 
be  remembered  that  there  are  many  truths 
so  simple  that  they  escape  the  attention  of 
erudite  men. 

The  bottom  reason  why  credit  should  not 
be  administered  from  the  standpoint  of  se- 
curity-holders, is  that  it  cannot  be  for  long. 
If  the  attempt  is  made — as  indeed  it  has 
been  made,  quite  universally — the  economic 
system  is  thrown  into  periodical  convulsions, 
tending  toward  a  progressive  necrosis  of  the 
social  tissues  and  an  ultimate  paralysis  that 
can  be  staved  off  only  by  war.  By  means 
of  war,  and  the  accompanying  phenomena 
of  political  absolutism,  the  credit-centre  is 
shifted  to  the  power  that  commands  the 
fighting  forces,  and  is  then  administered  with 
main  consideration  for  the  productive — or 
destructive — process. 


182         THE  GREAT  NEWS 

The  financiers  who  suppose  they  can  go 
on  indefinitely  nursing  the  claims  of  the 
mortgagees  of  industry,  but  not  nursing  in- 
dustry itself,  do  not  understand  their  trade. 
It  has  limitations  in  nature.  One  should 
not  cross  a  bridge  with  a  heavier  train  than 
its  girders  will  stand;  and  one  should  not 
lay  upon  the  shoulders  of  labor  and  enter- 
prise greater  burdens  than  human  nature 
can  bear.  People  who  manage  banks  and 
high  financial  undertakings  without  concern- 
ing themselves  about  the  physical  conditions 
of  existence,  do  not  manage  them  well. 

Much  of  the  present  strength  of  Germany 
is  due  to  the  fact  that  there  had  grown  up 
there,  before  the  war,  a  system  of  commer- 
cial banks  that  really  took  an  interest  in  the 
extension  of  enterprises  and  the  advance- 
ment of  practical  arts.  A  beginning  had 
been  made  toward  the  administration  of 
credits  for  the  upbuilding  of  a  common- 
wealth. In  England,  France  and  the 
United  States,  the  promotion  and  under- 


UNFITNESS  OF  SYSTEM    183 

writing  of  enterprises  was  carried  on  by  the 
banks  with  an  eye  that  was  rarely  deflected 
from  the  standpoint  of  the  security-holder; 
but  the  Deutsche  Bank,  the  Dresdener  Bank 
and  the  Disconto  Gesellschaft  were  some- 
what capable  of  the  social-economic  point  of 
view.  They  had  some  perception  of  the 
truth  that  no  business  venture  can  be  made 
to  pay  by  itself;  that  the  validity  of  all  se- 
curities depends  upon  the  creative  power  of 
the  whole  volume  of  business;  and  that  the 
industrial  powers  can  be  brought  to  a  stand- 
still and  the  stock  and  bond  structure  re- 
duced to  scraps  of  paper — just  by  taking 
each  concern  separately,  and  laying  upon  it 
the  heaviest  possible  tax  of  unearned  income. 
The  broadest  reason  why  Germany  is 
stronger  than  Great  Britain  and  France 
combined,  is  that  she  long  ago  recognized  the 
fact  that  the  credit  power  is  public  and  po- 
litical— and  they  did  not. 

It  does  not  follow  that  the  United  States, 
or  any  other  democratic  country,  should  imi- 


184         THE  GREAT  NEWS 

tate  the  German  banking  system.  The  point 
is,  that  the  administration  of  credit  is  half 
of  modern  government  (taken  in  connection 
with  the  news  service,  it  is  a  good  deal  more 
than  half)  and  any  government  must  neces- 
sarily be  weak  that  allows  half  its  powers  to 
be  exercised  in  derogation  of  the  other  half. 

In  a  feudal  state  like  the  German  Empire 
the  integration  of  governmental  powers 
must  be  effected  on  feudalistic  principles. 
In  a  democratic  state  like  ours,  the  thing 
should  be  done  on  democratic  principles. 

If  the  ultimate  police  power  in  the  United 
States  is  lodged  in  local  political  primaries, 
then  those  primaries  ought  also  to  be  credit- 
centres,  or  at  least,  should  have  very  definite 
correlation  with  the  local  credit-centres. 
For  if  the  local  credit-centres  are  worked  for 
private  profit  and  without  regard  to  the 
general  public  aim,  it  is  impossible  that  the 
productive  process  should  not  be  weak. 

The  immemorial  obstacle  to  a  sound  so- 
cial organization  of  the  productive  process, 


UNFITNESS  OF  SYSTEM    185 

is  that  absolutism  of  the  common  mind 
which  supports  the  transcendental  political 
sovereignty  and  the  unqualified  right  of  pro- 
perty, in  preference  to  all  practical  consid- 
erations. One  might  almost  say  that  the  ob- 
stacle is  just  the  thing  that  Mr.  JSTearing 
mistakenly  looks  to  for  the  removing  of  ob- 
stacles. He  says:  "If  there  is  one  deep- 
rooted  conviction  in  the  human  breast  it  is 
that  each  person  has  a  right  to  what  he 
earns." 

Now  it  is  profoundly  true  that  social  equi- 
librium requires  that  every  man's  legal 
power  over  materials  should  substantially 
coincide  with  his  productive  power;  but  the 
sharp  note  of  severing  individualism  in  Mr. 
Nearing's  dictum  is  not  modern  and  not 
practical.  This  stubborn  conviction  of  the 
absoluteness  of  property  rights-  is  by  no 
means  the  deepest-rooted  conviction  "in  the 
human  breast,"  but  it  is  deep  enough  to 
make  a  world  of  trouble.  For  given  an  un- 
organized, or  weakly  organized  multitude, 
bent  each  on  getting  exactly  what  he  earns — 


1861         THE  GREAT  NEWS 

and  the  road  is  paved  smooth  for  privilege. 
The  strength  of  privilege  is  that  false  and  il- 
lusory idea  of  exact  distributive  justice 
which  is  the  heart  of  platonic  politics  and  the 
spine  of  the  sovereign  state. 

Men  can  combine  firmly  for  piracy,  or  for 
the  generous  aims  of  the  venturesome  and 
creative  spirit.  But  it  is  impossible  to  com- 
bine for  exact  justice.  The  idea  of  exact 
justice  is  divisive.  It  furnishes  no  margin 
of  mutuality  to  bind  men  together. 

Therefore  the  state  dedicated  to  exact  dis- 
tributive justice  is  an  illusion  of  the  multi- 
tude and  a  sham.  In  practical  fact,  it  is  al- 
ways ruled  by  the  strongest  combination — 
whether  for  loot  or  for  social  service — that 
happens  to  be  extant  within  its  jurisdic- 
tion. 

The  privileged  and  ruling  class  is  usually 
actuated  by  a  fusion  of  predaceousness  and 
devotion.  When  the  former  motive  predom- 
inates in  an  extreme  degree,  the  regime  de- 
stroys itself  and  disintegrates. 


UNFITNESS  OF  SYSTEM    187 

Mr.  Nearing  does  not  perceive  the  cheer- 
ful truth  that  the  modern  business  system — 
the  regime  of  capital,  credit,  contract  and 
corporate  organization — is  peculiarly  unfit 
for  the  uses  of  secure  and  permanent  ex- 
ploitation. He  says  that  by  the  development 
of  easily  transferable  titles  to  income-yield- 
ing property, — stocks  and  bonds — "the 
western  world  has  produced  the  most  ef- 
fective means  ever  devised  for  enabling  one 
group  in  the  community  to  live  upon  the 
work  done  by  the  others."  He  fails  to  re- 
mark that  this  fact  of  the  subtilizing  and 
mobilizing  of  property,  weakens  its  abso- 
luteness and  makes  it  relative  and  merely 
contractual — an  investiture  that  is  almost  as 
easily  stripped  off  as  put  on. 

He  fails  also  to  notice  that  gross  mo- 
nopoly gets  its  lodgment  in  the  modern  busi- 
ness system  not  because  of  anything  that  is 
inherent  in  that  system,  but  because  of  the 
corruption  of  the  system  through  its  ill- 
starred  relationship  to  an  obsolete  kind  of 


188         THE  GREAT  NEWS 

political  state.  And,  finally,  Mr.  Nearing 
fails  to  observe  that  privilege  is  absolutely 
alien  and  unconstitutional  to  a  system  whose 
vitality  and  normal  operation  depends  upon 
the  genuineness  of  credits  and  the  purging 
of  contracts  from  fraud  and  duress — so  that 
the  system  necessarily  dead-locks  and  de- 
stroys itself  if  it  becomes  organically  and 
chronically  predaceous  and  unproductive. 

The  fact  is,  therefore,  that  the  easy  para- 
sitism to  which  the  modern  business  lends  it- 
self, is  illusory  and  short-lived.  So  far  is  it 
from  being  true  that  the  western  world 
has  produced  a  system  peculiarly  favorable 
to  privilege,  that  the  very  opposite  is  the 
case.  Never,  since  the  world  began,  has  a 
privileged  class  committed  its  unworthy 
fortunes  to  so  unsuitable  an  instrumental- 
ity for  the  establishment  of  a  non-produc- 
tive caste.  For  many  ages,  privilege  has 
found  consecration  and  a  secure  lodgment 
under  one,  or  another,  form  of  static  law — 
the  rigid  peace  of  the  Roman  pandects,  the 
multiplied  shapes  of  dynastic  prerogatives. 


the  constitutions  of  classic  republicanism  or 
the  cold,  pedantic  literalism  of  China. 

But  privilege  can  have  no  peace  and  no 
continuing  dwelling-place  within  the  juris- 
diction of  the  modern  business  system,  be- 
cause the  inner  law  of  that  system,  the  law 
by  which  it  lives  or  dies,  is  not  arbitrary  but 
intrinsic,  not  static  but  dynamic.  It  is  in- 
deed the  only  historic  form  of  grand-scale 
social  organization  that  is  not  like  a  machine 
but  like  a  living  organism — that  must  func- 
tion harmoniously,  or  fall  into  fevers  and 
convulsions,  a  body  that  is  poisoned  and 
paralyzed  by  unexcretable  monopoly. 

Or  say  if  you  will,  that  the  modern  or- 
ganization of  industry  and  commerce  is  not 
a  thing  of  nature  but  a  stupendous  work  of 
art.  It  lives,  not  by  subjection  to  nature, 
but  by  the  conquest  of  nature — a  triumph 
that  can  never  rest,  but  must  go  on,  or  per- 
ish. 

No  man  as  a  mere  creature  and  subject 
of  law,  can  understand  it  or  enter  into  its 


190         THE  GREAT  NEWS 

spirit.  It  belongs  to  man  as  creator— im- 
posing upon  the  material  universe  the  laws 
of  his  own  humanity.  And  this  adventure 
is  so  great  and  perilous  that  it  cannot  pos- 
sibly be  carried  on  without  the  maintenance 
of  a  general  understanding  and  community 
of  interest  among  all,  or  most,  of  those  en- 
gaged in  it. 

The  heart  of  the  matter  is  not  property 
or  ownership  but  the  correlation  and  direc- 
tion of  creative  powers — through  credit- 
centres,  at  which  men  assemble,  not  their 
assurances  but  their  adventures,  not  their 
timidities  but  their  affirmative  and  crea- 
tive faiths. 

The  system  of  industry  and  commerce  is 
poisoned  and  paralyzed  and  has  fallen  into 
fevers  and  convulsions  of  war — because  the 
credit-centres  have  been  inverted  and  have 
worked  a  kind  of  suicide  of  business — sub- 
jecting the  masters  of  arts  and  enterprise  to 
the  holders  of  securities. 

This  inverted  capitalism  has  ransacked 


UNFITNESS  OF  SYSTEM    191 

the  corners  of  the  earth  to  find  the  places 
where  life  is  cheapest.  In  the  countries  of 
high  political  traditions — England,  France, 
the  United  States — the  democracies  have 
stormed  the  polls  and  the  parliaments,  to 
get  laws  passed  for  justice  and  the  raising 
of  the  standard  of  living;  but  the  practical 
effect  of  these  endeavors  to  make  men  dear, 
has  been  the  export  of  capital  to  the  com- 
munities and  countries  where  men  were 
cheap. 

The  moral  is  that  it  is  entirely  futile  to 
try  to  make  human  life  dear  by  legislation — 
so  long  as  the  credit-centres  are  controlled 
in  the  exclusive  interest  of  a  creditor  class. 
We  must  accept  the  axiom  that  the  credit- 
centres  should  be  operated  with  primary 
consideration  for  the  producers.  It  is  abso- 
lutely necessary  that  people  should  get 
credit  for  doing  things;  it  is  only  contin- 
gently necessary  that  they  should  get  credit 
for  owning  things.  The  way  to  make  secur- 
ities secure  is  to  first  see  to  it  that  wealth 
shall  be  produced. 


192         THE  GREAT  NEWS 

Now  there  is  only  one  way  to  make"  sure 
that  wealth  shall  be  produced;  the  produc- 
ers must  take  the  matter  in  hand.  And  the 
way  for  them  to  take  it  in  hand  is  obvious ; 
they  must  take  possession  of  the  credit-cen- 
tres— or  make  new  ones  on  their  own  ac- 
count. 

The  solution  of  the  social  problem  is  as- 
tonishingly simple.  It  may  require  mental 
and  moral  qualities  that  we  do  not  yet  pos- 
sess— a  certain  carelessness  about  getting 
paid  exactly  what  we  earn,  a  willingness  to 
take  much  more  or  much  less  than  that,  a 
free  commitment  to  the  exhilaration  of  the 
creative  process,  emancipation  from  the 
cant  of  self-sacrifice  and  public-spiritedness, 
a  real  emotional  interest  in  concrete  results. 

The  serious  obstacles  to  the  solution  of 
the  social  problem  are  all  merely  spiritual, 
psychological.  There  is  no  reason  in  the 
world,  except  our  infirmities  of  will  and  in- 
tellect, why  the  control  of  the  production  of 
wealth  in  the  United  States  should  not  be 
transferred  within  a  single  year  from  the 


£TNFITNESS  OE  SYSTEM    193 

agents  of  those  who  own  things  to  the  agents 
of  those  who  do  things. 

Never  since  the  beginning  of  the  world 
has  the  control  of  wealth  been  so  easily 
transferable  as  it  is  now.  Wealth  has  ceased 
to  be  solid  and  has  become  liquid.  It  runs 
and  flows.  It  courses  through  the  deepest 
channels  that  are  to  be  found.  And,  if  a 
commonwealth  would  empty  the  shallow 
streams  and  stagnant  pools  of  monopoly,  it 
has  only  to  canalize  in  accordance  with 
gravitational  law. 

To  speak  without  a  metaphor,  the  simple 
truth  is,  that  banks  or  credit-centres,  formed 
expressly  to  foster  production,  would  be 
stronger  and  more  secure  than  are  the  banks 
that  are  formed  mainly  to  promote  the  in- 
terests of  security-holders;  and  wherever 
credit-centres  of  the  two  kinds  shall  stand 
side  by  side,  predominant  economic  power 
will  pass  to  the  former  kind.  This  would  be 
the  case  even  if  the  initial  capitalization  of 
the  latter  were  much  higher  than  that  of 


194         THE  GREAT  NEWS 

the  former.  For  the  kind  of  banking  that  is 
always  thinking  of  securities  and  never  of 
the  production  of  the  values  upon  which  se- 
curities rest,  is  always  running  toward  bank- 
ruptcy. 

This  unpractical  tendency  of  orthodox 
banking-systems  is  illustrated  by  the  peri- 
odical crises  with  which  we  are  familiar.  But 
it  is  to  be  remarked  that  the  bankruptcy 
need  not,  and  generally  does  not,  fall  upon 
the  banks.  It  falls  upon  the  bravest  ad- 
venturers of  business.  It  commonly  crum- 
ples up  the  firing  line  of  enterprise  and 
leaves  the  gentlemen  of  the  general  staff 
quite  secure  at  headquarters. 

The  periodical  crises  grow  continually 
more  violent  and  devastating  from  decade 
to  decade.  They  are  paralytic  strokes  weak- 
ening the  vitals  of  economic  society — by 
transferring  an  ever  larger  measure  of  pow- 
er from  the  producers  to  the  security-hold- 
ers. The  crises  are  directly  due  to  the  fact 
that  the  credit-function  is  worked,  not  in 


UNFITNESS  OF  SYSTEM    195 

the  interest  of  those  who  serve  the  common- 
wealth, with  head  and  hand,  but  rather  in 
the  interest  of  those  whose  only  striving  is 
for  the  increase  of  their  mortgage  claims 
against  the  working  organization. 

To  understand  this  inversion  of  the  busi- 
ness system,  this  fundamental  unsoundness 
and  absurdity  of  the  central  administration 
of  economic  affairs,  is  to  be  delivered  from 
shallowness  and  triviality  in  the  discussion 
of  social  problems.  One  comes  indeed  to 
see  that  all  social  problems  are  reducible  to 
this  one  problem,  that  their  unnumbered 
woes  are  emanations  from  a  primal  and  cen- 
tral barbarism. 

Civilizations  rise  and  fall,  not  because  it 
is  natural  and  inevitable  that  history  should 
move  in  a  rhythm  of  alternate  hope  and  dis- 
appointment— but  simply  because  there 
never  yet  has  risen  a  civil  order  that  has 
been  soundly  civil  at  the  heart. 

It  is  barbarism — crass,  stupid,  Breotian 
— that  has  established  sovereignties  on  any- 


196         THE  GREAT  NEWS 

thing  and  everything  save  the  one  thing  that 
is  fit  to  sustain  an  unquestionable  right  and 
power,  to  wit,  the  company  and  concord  of 
those  who  know  their  way  about  in  the  real 
world — the  masters  of  the  earth  and  the 
sea  and  the  actual  builders  of  cities.  The 
world  has,  in  general,  been  badly  ruled  be- 
cause of  the  primal  faithlessness — the  orig- 
inal and  hereditary  sin  of  the  race — that  has 
disposed  the  mass  of  mankind,  in  all  lands 
and  all  ages,  to  invest  their  idealism  and  de- 
votion in  anything  and  everything  but  the 
day's  work. 

Hence  has  come  the  enormous  psycho- 
logical difficulty  of  getting  people  to  come 
together  on  a  basis  of  real  power — the  direct 
control  of  natural  forces;  and  the  fatal  fa- 
cility of  the  agglutination  of  masses  on  a 
basis  of  fine  words  and  flattering  promises. 

It  is  a  thing  of  heart-breaking  pathos — 
the  ever-renewed  illusion  that  summons  the 
youth  and  beauty  and  energy  of  mankind 
to  spend  themselves  in  defence  of  abstract 
principles  of  humanity. 


UNFITNESS  OF  SYSTEM    197 

This  summons  is  ever  on  the  lips  of  sin- 
cere political  guides  and  spiritual  pastors 
who  do  not  understand  the  gospel  of  the 
incarnation,  and  so  are  continually  deluded 
with  the  ancient  platonic  imagination  that 
ideas  are  objective  realities. 

There  is  no  abstract  principle  of  human- 
ity that  has  not  been  won — and  lost — a  thou- 
sand times.  Again  and  again,  times  beyond 
counting,  masses  of  valorous  men  have  been 
flung  bloodily  against  each  other,  for  the 
establishment  of  the  principle  of  personal 
liberty  or  of  socialization,  respect  for  con- 
tracts or  immunity  of  the  weak  from  vio- 
lence,— yet  none  of  these  principles  are  es- 
tablished. 

There  is  no  way  of  establishing  the  prin- 
ciples of  humanity  except  by  incarnating 
them  in  the  living  tissues  of  a  society  that 
has  made  the  humanities  constitutional. 
And  the  way  to  do  that  is  to  shift  the  ad- 
ministration of  social  credits  to  the  hands  of 
creative  men. 


198          THE  GREAT  NEWS 

This  is  the  meaning  of  Jesus  and  of  all 
authentic  experts  and  specialists  in  knowl- 
edge of  the  nature  of  men.  The  timeless 
Man  of  Nazareth — prime  instigator  of  the 
modern  spirit  and  projector  of  a  social  or- 
der that  should  be  civil  at  the  heart — did 
not  sacrifice  his  body  to  his  principles,  but 
to  his  project.  He  was  bent  upon  the  in- 
auguration of  a  society  in  which  the  credits 
should  be  administered,  not  by  the  creatures 
of  social  fortune,  but  by  the  creators 
thereof. 

The  current  tradition  of  Christianity  is 
exactly  preposterous.  The  inversion  of  the 
terms  of  the  great  project  was  the  natural 
consequence  of  its  miscarriage.  The  incep- 
tion of  the  project  was  challenged  by  social 
states  that  called  the  creatures  of  fortune, 
practical  men — and  called  the  creators, 
dreamers.  Some  centuries  later,  the  project 
grappled  with  the  old  states  in  the  most 
momentous  of  all  historic  conflicts.  A  psy- 
chologist, looking  out  upon  that  mediaeval 
struggle  between  the  Church  and  the  Em- 


UNFITNESS  OF  SYSTEM    199 

pire,  could  have  foretold  with  surety  that 
one  of  two  things  would  happen :  either  the 
new  social  order  of  the  creative  credit-mas- 
ters would  definitely  prevail  and  thus  deliver 
the  race  from  the  rule  of  political  and  re- 
ligious ideologues — or  else  these  would  re- 
turn in  full  feather  and  would  succeed,  not 
only  in  balking  the  bodily  force  of  the  great 
adventure,  but  also  in  transmuting  its  brave, 
pragmatic  doctrine  into  an  ascetic  dream. 

The  platonic  idealism  of  the  modern  sec- 
tarian religious  societies  that  have  possessed 
themselves  of  the  vocabulary  of  the  Church 
and  of  Christianity,  is  substantially  the 
thing  that  Christianity  was  commissioned  to 
put  an  end  to.  For  in  the  classic  Mediter- 
ranean world,  as  in  Europe  and  the  United 
States  to-day,  transcendentalism  was  the 
ally  of  legal  privilege.  A  puristic  religion 
consecrated  incompetents,  set  the  makers  of 
phrases  in  authority  over  the  masters  of 
materials  and  put  the  credit  of  society  at  the 
disposal  of  those  who  received  most  and 
served  least. 


200         THE  GREAT  NEWS 

Now  the  true  doctrine  of  social  regenera- 
tion is  a  commonplace,  a  platitude,  "a  di- 
vine banalite."  It  is  incredibly  simple.  It 
is  difficult  to  believe,  and  always  has  been 
difficult,  because  it  puts  no  strain  at  all  on 
credulity — in  a  world  that  prefers  to  yield 
itself  to  phantasy  and  phrases. 

The  proposal  is  that  the  social  sovereign- 
ty shall  lodge  with  the  strong,  not  with  the 
weak;  with  those  who  have  original  and  per- 
sonal power  over  the  materials  of  nature, 
not  with  those  to  whom  power  is  imputed 
by  a  legal  fiction.  The  proposal  is  that  au- 
thority shall  rest  with  men  of  creative,  or- 
ganizing intellect,  not  with  rhetoricians, 
critics  and  dialecticians;  with  men  of  spirit 
who  are  self-compelled  to  support  more  than 
the  weight  of  their  own  bodies,  not  with  those 
who  are  willing  to  be  supported;  with  the 
proud,  not  the  vain;  the  faithful,  not  the  cred- 
ulous; with  those  who  are  sensitive  and  se- 
vere, not  those  who  are  sentimental  and  cruel. 

But  why  multiply  antitheses?  All  has 
been  said  when  it  has  been  said  that  a  sane 


UNFITNESS  OF  SYSTEM    201 

and  continuously  workable  social  order  is 
one  that  rests  frankly  upon  what  is  great 
in  human  nature — abandoning  the  enfee- 
bling and  Utopian  effort  to  set  up  a  super- 
human government. 

This  is  what  is  meant — when  anything  is 
meant — by  the  sovereignty  of  the  people. 
That  idea  is  bedded  deep  in  the  history  and 
politics  of  the  United  States.  The  fathers 
of  the  Constitution,  planning  in  accordance 
with  the  teaching  of  Montesquieu  and  other 
European  philosophers  of  democracy,  took 
pains  to  split  our  political  officialdom  into 
three  equal  and  jealous  parts — in  order  that 
there  might  be  no  supreme  power,  no  sov- 
ereignty outside  the  body  of  the  people.  It 
was  by  an  apostasy  from  this  purpose  that 
the  courts  of  the  country  became  nearly  ab- 
solute in  peace,  and  the  executives  nearly 
absolute  for  martial  law  and  war.  But  the 
purpose  has  not  yet  lost  its  historical  mo- 
mentum. It  is  possible  to  recover  the  sov- 
ereignty of  the  people. 


202         THE  GREAT  NEWS 

Wherever  there  is  a  government  that 
stands  apart  from  the  people,  there  the  so- 
cial credits  are  administered  by  mort- 
gagees of  the  public  estate  and  not  by  the 
creators  of  values.  On  the  other  hand,  to 
make  the  sovereignty  of  the  people  a  liv- 
ing principle  is  the  same  thing  as  to  put 
credit-administration  into  the  hands  of  pro- 
ducers. Thus  the  rectification  of  the  busi- 
ness system  is  the  recovery  of  democracy. 

From  the  point  of  view  of  democratic 
politics  the  practical  effect  of  the  rise  of  the 
business  system  is  to  so  fluidize  social  condi- 
tions throughout  the  whole  circle  of  com- 
merce that  the  issue  between  the  sovereignty 
of  the  people  and  the  sovereignty  of  gov- 
ernments is  made  sharp  and  precipitate. 
The  rise  of  the  business  system  has  made 
half-hearted  democracy  impossible. 

The  only  possibilities  now  in  sight  are, 
on  one  hand,  the  military  and  absolutist 
state,  and,  on  the  other  hand,  authentic  and 
thoroughgoing  democracy.  If  we  cannot 


UNFITNESS  OF  SYSTEM    203 

now  produce  a  genuine  democratic  and  prag- 
matic politics  in  which  the  apparatus  of 
wealth  production  shall  be  controlled  by  the 
makers  of  the  social  fortune,  we  shall  drift 
rapidly  toward  universal  militarism  and  an 
age  of  more  or  less  intermittent  war. 

The  business  system,  democratized  and 
made  self -consistent  through  the  shifting  of 
political  administration  to  the  hands  of  pro- 
ducers, would  probably  effect  such  a  mobi- 
lization of  creative  forces  as  has  never  been 
known  or  clearly  imagined,  would  put  an 
end  to  the  long  ages  of  alternate  freedom 
and  bondage,  glory  and  decay,  and  would 
commit  the  world  to  a  career  of  uninter- 
ruptible improvement. 

If,  however,  we  do  not  succeed  in  democ- 
ratizing the  business  system,  the  war  that 
has  begun  in  Europe,  Asia  and  Africa  will 
— most  likely — in  spite  of  occasional  truces, 
involve  the  whole  world;  and  we  shall  enter 
into  a  dark  age  of  which  no  man  can  see 
the  end. 


IX 

RESUBGENCE  OF  WOMAN 

THE  news  is  that  men  are  not  going 
to  act  like  women  any  more  nor  wom- 
en like  men — that  men  are  going  to  be  male 
and  women  female  and  they  are  going  to 
"dress  and  keep  the  Garden"  together,  with 
good  faith  and  gaiety  of  heart. 

It  appears  that  Adam  was  effeminated 
by  his  refusal  of  the  hazards  of  nature,  his 
insistence  upon  a  cock-sure  rule  to  keep  him 
from  going  wrong.  He  would  sit  down 
under  the  Tree  and  ruminate  about  law  and 
order  and  the  rights  of  man.  He  insisted 
upon  having  a  Constitution,  before  going 
to  work.  His  Business  was  to  be  subjected 
to  a  transcendental  Politics. 

This  wise  old  Syrian  story  is  a  parable 
of  the  distracted  social  history  of  the  world. 

204 


RESURGENCE  OF  WOMAN    205 

The  original  sin  was  a  cleaving  solecism,  a 
shattering  absurdity.  This  futility  of  the 
typical  man — his  refusal  to  live  until  after 
he  had  thought  out  a  way  to  right  living — 
is  the  spring  of  unnumbered  woes,  the 
source  of  the  "social  problem." 

The  story  was  invented  in  a  cultivated 
age,  and  its  meaning  applies  particularly  to 
conditions  of  high  socialization,  rather  than 
to  the  more  primitive  propensities  of  man- 
kind. In  primitive  societies — so  far  as  they 
are  free  from  abnormal  retroversion  and  de- 
cadence— the  men  do  not  act  as  Adam  did. 
They  use  their  intellect  to  sail  boats  and 
kill  bears. 

In  primitive  societies  of  natural  poetry 
and  grace,  the  man  is  a  brave  monad  medi- 
tating lonely  adventures;  the  woman  is  the 
guardian  of  the  hearth,  the  economist  and 
assessor  of  values,  the  superintendent  of 
social  relations.  The  man  kills  the  wild 
beast  and  the  woman  cooks  it.  Both  these 
gestures  are  primordial  and  of  imperishable 
significance.  They  go  to  the  roots  of  sex. 


206         THE  GREAT  NEWS 

The  man  is  entrepreneur,  engineer,  sea- 
rover,  lone  ponderer  of  uncredited  projects 
— capable  of  holding  in  his  heart,  for  half 
a  life,  purposes  that  no  other  man  can  un- 
derstand, bound  by  very  force  of  his  male- 
ness  to  do  what  has  never  been  done,  to 
press  outward  at  some  point  the  frontier  of 
human  experience — therefore  compelled  al- 
ways to  tread  the  edge  of  unsociability, 
mocking  and  mocked  at,  holding  the  love  of 
comrades  only  by  a  sort  of  tender  scorn  and 
defiance. 

The  adorable  and  eternal  woman  is  com- 
plementary to  all  this.  She  is  to  the  man 
what  Isabella  was  to  Columbus.  She  is  civ- 
ilization, the  summator  and  conservator  of 
all  fine  stuffs,  fine  arts  and  fine  thoughts. 
Her  words  and  looks  are  the  tissue  of  so- 
ciety. She  is  incapable  of  thoughts  that 
have  not  to  do  with  persons,  of  projects  that 
are  not  social  enterprises  or  intrigues.  It 
would  be  mortal  for  her  to  stand  alone  with 
an  idea  against  the  common  scorn,  or  to  go 
out  alone  with  tools  or  weapons  against  the 


RESURGENCE  OF  WOMAN     207 

unhuman  dark  or  wild.  For  she  is  the 
Community.  In  her  all  the  strands  of  co- 
ordination meet,  she  is  the  centre  of  credit 
and  fortune.  She  evaluates  all  things  and 
gives  every  man  his  rating. 

It  was  not  necessary  that  Isabella  should 
know  the  facts  or  understand  the  argument 
for  the  untracked  way  around  the  world. 
It  was  merely  necessary  that  she  should 
know  a  man. 

It  is  not  in  men  to  know  a  man.  The 
courtiers  and  the  old-line  commercial  per- 
sons could  not  read  the  intangible  creden- 
tials of  Columbus.  They  stuck  fast  in  that 
male  blockheadism  of  the  accomplished  fact, 
which  insulates  every  genetic  man  from  all 
his  fellows  and  makes  it  impossible  that  his 
power  should  be  acclaimed  in  male  circles 
until  after  it  is  mostly  spent  and  past.  But 
the  case  was  altogether  different  with  Isa- 
bella— is  different  with  all  wise  deep-hearted 
women.  They  do  not  care  for  power  that 
is  spent  and  past.  They  love  power  that  is 
latent,  contained  and  baffled — for  such  pow- 


208         THE  GREAT  NEWS 

er  is  the  living  maleness  of  a  man.  The 
source  of  it  is  as  deep  as  sex — and  sex  re- 
sponds to  it.  Therefore  there  can  be  no 
real  progress  in  a  society  where  Isabella  is 
uncrowned. 

In  the  most  poignant  passage  of  history 
the  doctors,  lawyers,  judges  and  governors, 
the  scribes,  pharisees  and  the  whole  male 
populace  fell  upon  the  Master  of  the  Un- 
discovered World,  with  words,  arguments, 
statutes,  statistics  and  crucifying  scorn,  be- 
cause the  only  power  that  could  discern  and 
accredit  the  unaccomplished  strength  had 
been  dislodged,  because  the  social  centre 
had  been  usurped  by  effeminated  males — 
"and  the  women  stood  afar  off!" 

The  place  of  women  is  at  the  centre  of 
society;  the  place  of  men  is  at  the  periphery 
and  the  frontier.  The  effectual  and  original 
contribution  that  each  man  can  make  to 
civilization  cannot  pass  directly  from  point 
to  point  on  the  circumference,  but  should 
first  pass  inward  along  his  own  proper 


RESURGENCE  OF,  WOMAN    209 

radial  connection  with  the  feminine  focus — • 
where  the  accounts  should  be  kept  and  the 
masters  of  arts  and  creators  of  full  values 
should  be  separated  from  the  short-weights 
and  charlatans. 

In  all  the  great  and  storied  passages  of 
history,  when  for  a  moment  some  Jupiter 
has  found  his  Juno,  some  Ulysses  his  Pene- 
lope, society  exhibits  an  aspect  that  is  nor- 
mal and  beautiful,  expressing  the  poetry  and 
success  of  natural  sex  relations.  But  for 
the  most  part  the  history  of  high  civilization 
has  reflected  the  dull  prosiness  and  inepti- 
tude of  the  Adamic  tale.  History  is  an  Iliad 
of  woes,  crimes  and  carnage  of  which  the 
ever-recurring  motive  is  the  rape  of  Helen 
— the  displacement  of  a  woman  from  the 
heart  of  her  realm. 

It  is  not  in  the  simpler  forms  of  society 
but  in  the  more  complex  forms  that  the 
mental  toploftiness  and  unmanliness  of 
Adam  is  reflected — because  the  temptation 
that  besets  a  man  to  unman  himself  as 


210         THE  GREAT  NEWS 

Adam  did,  becomes  more  seductive  as  so- 
ciety grows  more  complex.  To  be  sure  the 
temptation  to  escape  from  the  risks  of  the 
flowing  world  to  the  shelter  of  a  no-man's 
land  of  perfect  ideas,  is  intrinsic  to  the  na- 
ture of  a  human  being — a  being  gifted  with 
the  sublime  and  terrible  power  of  abstract 
thought  and  the  thaumaturgic  faculty  of 
Words.  To  withdraw  one's  interest  from  the 
mysterious  and  uncompassable  reality  of  a 
farm — with  its  risk  and  flux  of  ceaseless 
nature,  its  unpredictable  fatalities — and  to 
lucubrate  toward  high  heaven  in  search  of 
the  perfect  formulas  of  farming — this  is  a 
temptation  to  which  plough-boys  are  ex- 
posed. And  a  similar  lure  is  present  to 
anchorites.  But  this  primordial  human  pas- 
sion to  make  use  of  words  in  order  to  escape 
from  the  pressure  of  things,  is  not  strong 
enough  to  permanently  shut  out  the  impor- 
tunate and  sanifying  realities  of  the  world — 
for  people  who  live  simple  lives  in  loneliness 
or  in  small  and  unsophisticated  communities. 
It  is  with  the  rise  of  cities  and  the  de- 


RESURGENCE  OF  WOMAN     211 

velopment  of  complex  social  conditions  that 
"the  original  sin"  becomes  frightful  in  its 
effects.  For  under  such  circumstances  men 
of  exceptional  word-power  find  it  easy  to 
live  delicately  and  to  absorb  all  the  high 
honors  and  emoluments.  They  have  only 
to  be  sincere  in  their  conviction  of  their  own 
"knowledge  of  good  and  evil" — for  no  hypoc- 
risy can  be  strong  until  it  has  become  un- 
conscious (until  the  very  virtue  in  a  man 
has  become  foolishness  and  his  light  dark- 
ness) and  then  they  can  impose  upon  the 
minds  of  ordinary  men  any  legal  code  that 
is  logical  and  self -consistent,  however  irrel- 
evant to  the  natural  conditions  of  exist- 
ence and  devoid  of  that  flexibility  that  is 
necessary  to  progress  in  the  practical  arts. 
So  subtle  and  strong  is  the  temptation  laid 
upon  men  of  exceptional  powers  of  abstrac- 
tion, so  alluring  are  the  social  rewards  held 
out  to  them,  so  crushing  are  the  penalties 
imposed  upon  those  who  resist  the  lure,  that 
one  has  only  to  understand  the  nature  of 
this  temptation  in  order  to  be  delivered  from 


212         THE  GREAT  NEWS 

all  wonder  at  the  crucifixion  of  the  great 
realists  and  the  recurrent  collapse  and  fail- 
ure of  civilization. 

The  enormous  hurt  and  pain  of  the  world 
in  these  times  is  chiefly  due  to  an  overstrain- 
ing— to  the  breaking  point — of  the  contra- 
diction between  the  rigid  and  static  law  of 
the  old  politics  and  the  adaptive  and  dy- 
namic law  of  the  working  world.  The 
woman's  movement  would  be  wholly  abor- 
tive, and  would  only  add  to  the  hurt  and 
pain,  if  women  were  now  to  rush  out  of 
their  houses  and  into  the  forum,  to  mimic 
the  condemned  and  obsolescent  politics  of 
the  men. 

The  radical  vice  of  the  old  politics  is  its 
rapt  idealism  and  round-aboutness.  A  new 
realism  has  we  trust  now  dawned  in  Wash- 
ington. But  in  the  country  at  large  the 
voters  are  still  supposed  to  come  together 
once  in  a  while  in  a  noble  mental  detach- 
ment from  their  day's  work  and  from  all 
the  things  they  personally  care  about. 


RESURGENCE  OF  WOMAN     213 

With  eyes  fixed  on  a  fine  phantasm  called 
"the  general  good"  they  cast  their  ballots 
into  the  urn  for  persons  suggested  to  them 
as  likely  to  be  still  more  detached  than  they 
— the  doubly  detached  servants  of  the  de- 
tached. By  this  means  it  is  hoped  to  gen- 
erate in  a  very  high  place  a  law  of  great 
purity  that  can  filter  down  into  all  the  low 
places — a  law  entirely  oblivious  of  carnal 
business  interests  and  the  coarse  need  of 
board  and  clothes,  and  therefore  grandly 
Sinaitic  and  sublime  and  worth  dying  for 
at  the  drop  of  the  hat. 

They  who  say  that  real  women  are  de- 
feminized  when  they  take  part  in  such  a 
process,  speak  the  sober  truth.  It  is  all 
very  well  to  vote — if  the  thing  can  be  done 
with  moderation.  For  the  fact  is  that  the 
office  of  the  voter  is  essentially  a  moder- 
ator's office — a  means  of  putting  a  veto  on 
official  failure  and  disorder.  It  never  can 
be  much  more,  in  a  great  country  organized 
for  work.  For  those  who  control  the  work- 
ing organization  will  always  project  the  po- 


214         THE  GREAT  NEWS 

litical  programmes  and  provide  the  candi- 
dates— whether  secretly  and  irresponsibly 
as  today,  or  openly  and  with  frank  respon- 
sibility. In  a  great  industrial  country  the 
voter,  just  as  a  voter,  can  never  have  any- 
thing to  say  but  Yes  or  No.  Henceforth  it 
is  only  as  participant  in  the  artistic-scien- 
tific process, — the  manipulation  and  dis- 
posal of  materials — that  one  can  exercise 
forth-putting  political  power.  Let  it  be  re- 
peated and  emphasized  again  and  again: 
the  organization  of  modern  industry  and 
commerce  has  generated  a  political  force  so 
great  that  no  other  political  force  can  cope 
with  it,  except  by  way  of  obstruction  or 
inhibition.  We  should  recognize  this  fact, 
and  should  accordingly  make  haste  to  so- 
cialize and  democratize  the  working  organi- 
zation by  which  we  all  live. 

Now  it  is  profoundly  feminine — beseem- 
ing the  Isabellas  and  all  the  most  womanly 
— to  hate  the  labored  mental  indirection,  the 
etiolated  intellectualism  of  our  traditionary 


RESURGENCE  OF  WOMAN     215 

politics — with  something  of  the  aversion 
they  feel  for  effeminate  men.  By  means  of 
this  Adamic  politics  with  its  shrinking  from 
the  real  contacts  of  nature,  men  have  lost 
something  of  their  manliness  and  become 
feminized.  They  have  treated  the  primor- 
dial struggle  for  spiritual  mastery  of  brute 
materials  as  if  it  were  a  matter  of  second- 
ary importance,  and  have  sat  down  with 
Penelope  to  knit  and  ravel  the  social  web 
and  weigh  the  fate  of  suitors.  They  have 
edged  their  way  to  the  centre  of  society  and 
have  shirked  the  exposure  of  the  frontier. 
It  is  in  the'  nature  of  a  resurgent  woman- 
kind to  emphatically  disapprove  of  a  poli- 
tics that  has  treated  the  thrilling  adventures 
and  arduous  labors  of  great  industry  and 
commerce  as  if  they  had  no  ruling  dignity 
or  authenticity  of  law. 

Isabella  understands  that  Columbus  is 
more  of  a  law-giver  than  the  courtiers  at 
her  feet.  And  the  true  mission  of  the 
woman's  movement  is  to  rebuke  the  po- 
litical eunuchry  and  intrigue  of  masculine 


216         THE  GREAT  NEWS 

housekeepers,  and  to  rouse  the  miners  and 
sailors,  the  explorers,  investigators  and  en- 
trepreneurs to  political  honor  and  responsi- 
bility. 

It  is  unpleasant  but  not  surprising  that 
in  the  first  impulse  of  the  modern  revolt  of 
womankind,  there  should  be  women  that  act 
like  feminized  men.  For  this  topsy-turvy- 
dom  of  sex  is  the  age-old  pity  and  shame 
of  the  Great  Inversion.  If  men  will  insist 
upon  keeping  house,  they  will  do  it  so  badly 
that  women  must  perforce  go  out  into  the 
streets  and  shout  for  help. 

The  natural  part  of  woman  is  to  be  the 
economist  or  maker  of  house-law.  In  the 
saner  society  for  which  we  hope,  this  office 
will  no  doubt  widen  and  socialize  itself — 
into  the  general  process  of  superintending 
the  merchandising,  correspondence  and  ac- 
countkeeping  of  communities,  the  regula- 
tion of  all  the  relations  of  human  beings 
with  one  another. 

Feminine  business  is  the  relating  of  man 


RESURGENCE  OF  WOMAN     217 

to  man.    Masculine  business  is  the  relating 
of  man  to  the  universe. 

What  a  dreary  platitude  it  is  to  say  that 
woman  has  a  place  in  politics!  Politics  is 
indeed  the  very  nature  of  woman.  And  the 
whole  recent  discussion  of  the  matter  is  the 
broadest  advertisement  of  our  mental  and 
moral  inversion. 

But  it  should  be  plain  why  men  of 
marked  mental  masculinity — like  Wood- 
row  Wilson,  for  example — are  not  much  at- 
tracted by  woman's  suffrage  propaganda 
in  its  most  current  form.  It  is  indeed  very 
possible  that  working  women  might  be  able, 
by  the  use  of  the  ballot,  to  intimidate  bosses 
and  legislative  steering-committees;  and 
there  is  no  reason  why  they  should  not  have 
it  for  that  use.  But  such  devices  are  tem- 
porary; and  the  conditions  on  which  they 
depend  will  soon  pass  to  the  better  or  the 
worse  without  much  reference  to  woman's 
suffrage.  Men  of  sense  are  not  willing  to 
limit  the  meaning  of  the  woman's  movement 


218         THE  GREAT  NEWS 

to  a  doubtful  promise  of  improvements  that 
might  be  got  by  other  means.  Every  honest 
man  is  affronted  at  the  idea  of  a  sex-war 
or  the  notion  that  women  are  just  a  social 
class,  with  class-claims  to  be  represented 
and  protected.  Women  have  never  been 
wronged  by  men  any  more  than  men  have 
been  wronged  by  women.  The  true  point 
is  that  as  things  stand  the  sex  relationship 
is  abnormal,  and  throughout  the  world  the 
most  masculine  men  and  the  most  feminine 
women  should  rise  up  and  right  it. 

The  direction  of  the  woman's  movement 
should  be  toward  the  centre  of  society.  It 
should  undertake  to  establish  an  authentic 
and  abiding  social  centre  in  every  commu- 
nity— a  centre  of  spiritual  influence  as  ef- 
fectual for  practical  social  purposes  as  the 
parish-church  was  in  the  days  when  the 
Church  was  Mistress  of  practical  arts. 

The  woman's  movement  should  develop 
the  inner,  but  as  yet  hardly  articulate,  mean- 
ing of  the  American  public  school.  For 


RESURGENCE  OF  WOMAN     219 

several  generations  the  American  people 
have  been  whole-hearted  to  prodigality  in 
the  payment  of  only  one  kind  of  taxes;  we 
have  poured  out  our  affluence  upon  the  pub- 
lic school — nearly  a  million  dollars  a  week  in 
New  York  City  alone. 

Yet  the  public  school  as  it  stands  is  rather 
a  prophecy  than  an  accomplished  fact.  It 
does  not  yet  mean  what  we  intend  it  to 
mean — a  union  of  the  vital  forces  of  a  com- 
munity in  the  spirit  of  creative  art  and 
science,  to  safeguard  the  social  fortune  and 
pass  it  on  improved. 

The  women  of  many  countries  who  met 
at  The  Hague  under  the  presidency  of  Miss 
Jane  Addams,  to  protest  against  the  war 
— did  a  brave  and  beautiful  thing.  But 
brave  women — "the  women  that  do  not 
weep" — should  be,  and  doubtless  will  be  the 
last  to  imagine  that  war  can  be  put  an  end 
to  by  international  conventions.  Such 
women  will  escape,  before  most  men  do, 
from  the  delusion  that  wide-spreading  and 


220         THE  GREAT  NEWS 

long-lasting  law  and  order  can  be  estab- 
lished through  an  enthronement  of  "the 
Knowledge  of  Good  and  Evil" — in  a  High 
Court  at  Washington  or  at  The  Hague. 

Women  who  have  kept  the  peace  of  large 
modern  families  know  that  that  kind  of 
thing  is  done  not  by  the  submission  of  dis- 
putes to  an  unquestionable  and  irresistible 
tribunal,  but  by  nursing  a  real  and  convinc- 
ing community  of  interest. 

Wise  women,  with  their  instinctive  prag- 
matism, their  deeply  human  and  humorous 
distrust  of  stiff  formulas,  have  no  difficulty 
in  understanding  a  certain  sociological 
truth  that  has  escaped  the  notice  of  most  of 
the  doctors  of  philosophy  and  divinity: 
namely,  that  the  most  perfect  legal  code,  if 
rigidly  applied,  will  infallibly  split  any  hu- 
man society  into  two  parts — one  above  the 
law  and  the  other  below  it;  that  the  former 
will  be  the  more  futile  of  the  two,  and  will 
in  time  compel  the  latter  to  fight  for  its  life 
and  for  the  natural  nourishment  of  the  com- 
munity. 


RESURGENCE  OF  WOMAN    221 

Women  have  a  life-instinct  that  will  keep 
them  from  supposing  that  the  struggle  for 
life  can  be  stopped  by  formal  law.  Senator 
Lodge  supposes  so,  but  it  is  hardly  believ- 
able that  Jane  Addams  does. 

To  a  real  American  woman  it  should  be 
plain  that  the  way  to  make  peace  on  a  grand 
scale  is  first  to  work  out  a  vital  community 
of  interest  on  a  small  scale  in  an  American 
town,  and  then  to  extend  the  living  institu- 
tion and  principle  of  that  concord  to  the 
state  and  nation — and  to  the  whole  world. 


X 

SPIRIT  OF  THE  GREAT  SHIPS 

A  RISTOTLE  remarked  that  it  is  im- 
<^~*>  possible  for  a  man  to  really  see  any- 
thing, until  after  he  has  learned  to  see  many 
things  at  one  view.  The  two  culminating 
disasters  that  go  by  the  names  Titanic  and 
Lusitania  are  likely  to  be  remembered  until 
their  meaning  has  become  a  commonplace, 
so  that  they  have  ceased  to  stand  out,  like 
alps  of  special  horror,  above  the  ordinary 
levels  of  experience.  To  see  these  events 
in  their  relations  to  the  conditions  of  the 
times  that  produced  them,  is  really  to  see 
them. 

The  Titanic  disaster  summed  up  and  sym- 
bolized the  futility  of  technical  progress — 
after  the  primary  control  of  the  tools  has 
been  taken  out  of  the  hands  of  men  like 
222 


SPIRIT  OF  GREAT  SHIPS     223 

Captain  Smith  who  went  down  with  the 
ship,  and  put  into  the  hands  of  such  men  as 
Mr.  Bruce  Ismay,  who  did  not. 

The  control  of  the  titan  tools  of  modern 
civilization  has,  as  a  matter  of  fact,  passed 
over  very  largely  into  the  hands  of  financial 
manipulators  and  promoters — who  do  not 
understand  them,  and  are  incompetent  to 
manage  them.  The  International  Mercan- 
tile Marine  is  an  example.  That  great  cor- 
poration was  born  decrepit;  it  has  recently 
gone  into  liquidation — dissolving  in  a  waste 
of  water  as  its  creature  the  Titanic  dis- 
solved. 

The  meaning  of  the  disaster  of  1912  is 
that  a  universal  business  system,  directed 
with  a  dwindling  and  at  best  merely  inci- 
dental regard  for  the  actual  subduing  of 
the  earth  and  the  seas,  and  heartily  inter- 
ested only  in  the  financial  aggrandizement 
of  a  few  persons,  or  the  profits  of  a  rela- 
tively small  money-investing  class — is  ab- 
solutely not  practical  en  this  kind  of  a 
planet. 


224         THE  GREAT  NEWS 

When  we  turn  to  consider  the  other  dis- 
aster we  should  perceive  that  it  is  no  more 
an  isolated  fact  than  is  the  wreck  of  the  Ti- 
tanic. For  a  generation  the  world  had 
been  gradually  losing  practical  economic 
power — power  to  make  human  beings  at 
home  in  the  material  world.  The  general 
earth-grip  was  relaxing,  because  the  emo- 
tional energy  of  mankind  was,  year  by  year, 
being  more  and  more  diverted  from  the  ac- 
tual earth-struggle  and  turned  into  ways 
of  dead  waste  and  loss.  Everywhere  nation 
against  nation  and  class  against  class,  the 
human  forces  that  should  have  been  invest- 
ed in  works  of  creative  art  and  engineering, 
were  turned  against  themselves  and  can- 
celled out. 

This  process  was  not  merely  enfeebling,  it 
was  indescribably  cruel.  The  natural  sym- 
pathies of  human  beings — that,  with  a  fair 
chance,  can  so  easily  bridge  all  distances  of 
race  and  condition — were  to  a  large  extent 
blunted  or  annulled.  The  misery  of  vast 
masses — such,  for  example,  as  was  repre- 


SPIRIT  OF  GREAT  SHIPS     225 

sented  in  the  City  of  New  York  in  the  win- 
ter of  1914-1915  by  the  industrial  disloca- 
tion of  four  hundred  thousand  wage-earn- 
ers— became  merely  a  matter  of  profes- 
sional charity  and  ceased  to  be  disturbing  to 
the  comfortable  classes.  As  the  actual  so- 
cial arrangements  deteriorated  in  human 
value,  they  became  more  sacrosanct  and  not- 
to-be-spoken-against.  There  were  signs 
everywhere  of  a  kind  of  mental  and  moral 
sclerosis,  a  stiffening  and  hardening  of  the 
mind,  so  that  public  opinion  became  stand- 
ardized and  was  incapable  of  any  reaction 
upon  events  except  en  masse  and  in  accord- 
ance with  well-grooved  categories  of  preju- 
dice. The  literature  of  compassion  became 
unfashionable.  The  passionate  protest 
against  social  injustice  that  had  marked  the 
last  quarter  of  the  nineteenth  century  had 
for  the  most  part  cooled  down  to  mere  criti- 
cism. 

The  War  of  1914  broke  upon  an  age  that 
was  morally  insensitive  to  an  extraordinary 


226         THE  GREAT  XEWS 

degree,  an  age  as  little  capable  of  natural 
and  unconventional  revolt  against  cruelty 
and  outrage,  as  any  age  since  Charlemagne. 
Thus  the  war  developed  on  all  hands  a  pitch 
of  mental  and  physical  ferocity  that  is  near- 
ly unparalleled. 

Sensitive  feeling  is  not  possible  to  a  gen- 
eration whose  fortuned  class  has  accustomed 
itself  to  live  delicately  in  the  midst  of  the 
deep  distress  of  its  intellectual  and  political 
equals.  For  it  is  more  hardening  to  the 
heart  to  allow  people  to  suffer  and  die  by 
mere  neglect  or  for  lack  of  legal  rights,  than 
it  is  to  contend  with  them  for  mastery  and 
reduce  them  to  subjection.  The  losers  are 
infinitely  less  disheartened  and  humiliated  in 
the  latter  case. 

It  seems  to  be  a  part  of  the  economy  of 
the  universe  that  a  highly  conventionalized 
and  unvital  morality  can  cure  itself  and  re- 
gain intelligence  and  feeling  only  by  passing 
through  various  descending  stages  of  cruelty 
until  it  strikes  the  bottom  of  the  pit,  and  ex- 


plodes.  The  explosion  is  a  sudden  release 
and  expansion  of  the  benignant  primal  in- 
stincts of  the  race,  in  the  presence  of  some 
atrocity  so  gross  that  only  the  last  refine- 
ment of  deliberate  legalism  could  have  pro- 
duced it. 

It  is  in  this  manner  that  the  incredible 
outrage  of  Calvary  shattered  the  Roman 
Empire  and  projected  into  the  world  so  pro- 
found a  distrust  of  conventionalized  con- 
science, so  confident  a  reassurance  of  the  va- 
lidity of  the  heart,  that  the  force  of  that  im- 
pulse is  not  yet  spent.  The  marvellous  fab- 
ric of  the  Mediaeval  Church — exceedingly 
delicate  and  strong — was  woven  across  the 
frontiers  of  many  nations,  in  the  strength 
of  the  recoil  of  simple  human  nature  from 
the  perfect  logic — the  abominably  perfect 
logic — of  the  pharisees.  It  will  be  recalled 
that  they  shouted  in  the  palace-yard  of 
Pontius  Pilate:  "We  have  a  law,  and  by  our 
law  he  ought  to  die!"  Their  law  was  the 
law  of  a  narrow  and  illiberal  nationalism  like 
that  which  at  this  moment  actuates  Ger- 


228         THE  GREAT  NEWS 

many,  England,  France  and,  perhaps,  the 
United  States. 


The  war  exposes  the  incompatibility  of 
our  inherited  superstitions  about  the  abso- 
lute sovereignty  of  governments  and  the  ab- 
solute rights  of  property — with  the  demands 
of  a  practicable  system  of  international  in- 
dustry and  commerce. 

None  of  the  belligerent  nations  are  fight- 
ing for  a  sound  business  system,  and  a  world- 
wide mobilization  of  working  forces.  They 
are  all  fighting  for  legal  archaisms  and  na- 
tional rights. 

In  the  name  of  these  rights  a  great  va- 
riety of  mentally  consecutive  but  morally 
preposterous  deeds  have  been  committed  on 
all  hands.  On  the  7th  of  May,  1915, 
the  logic  of  the  absolute  right  of  national 
sovereignty  and  the  absolute  right  of  pri- 
vate property  reached  its  climax.  There 
was  an  explosion,  so  piercing  and  shatter- 
ing that  it  might  have  cracked  the  compla- 


SPIRIT  OF  GREAT  SHIPS     229 

cency  of  moralists,  and  broken  the  heart  of 
the  world. 

From  the  point  of  view  of  unsophisticated 
humanity  it  is  impossible  to  over-state  the 
wrong  of  the  attack  on  the  Lusitania.  Its 
cruelty  is  comparable  with  that  of  Ludlow 
in  Colorado  or  the  age-long  industrial 
wrongs  of  England.  Its  ruthlessness  is  like 
that  of  "Hell-roaring  Jake"  Smith  in  the 
Philippines,  or  of  General  Kitchener  in  the 
Nile  Country. 

But  the  special  significance  of  the  awful 
event  of  May  7th  lies  in  the  fact  that  it 
broke  through  the  crust  of  legality.  Though 
it  followed  an  inflexible  logic  with  the  fatal- 
ity of  a  tragic  play,  it  failed  to  stop  at  the 
outer  limits  of  our  capacity  for  sanctioning 
cruelty  by  law. 

The  English-speaking  nations  can  endure 
without  passionate  protest  the  slow  crushing 
of  women  and  children  by  economic  pres- 


230         THE  GREAT  NEWS 

sure,  or  their  wholesale  elimination  by  vio- 
lence in  scores  of  military  massacres  from 
Drogheda  to  Caloocan  and  Samar.  But  we 
have  always  been  scrupulous  that  such  things 
shall  be  done  within  the  limits  of  the  laws 
of  sovereignty  and  property. 

This  truth  is  not  to  be  set  down  in  satire. 
It  is  a  truth  that  applies  to  many  nations  and 
to  all  centuries.  It  is  the  burden  and  agony 
of  the  world  that  the  letter  of  the  law  has 
been  murderous,  because  men  have  been  dull 
and  slow  in  finding  a  form  of  politics  that 
does  not  sacrifice  life  to  logic.  Yet  it  is  to 
be  noted  that  nations  are  great  and  master- 
ful in  just  the  degree  that  they  succeed  in 
this  quest.  The  greatest  nation  is  the  na- 
tion whose  law  keeps  closest  to  the  primal 
instincts  of  humanity  and  that  is  capable  of 
defying  logic  and  the  constitution — to  save 
life. 

The  outburst  of  anger  at  the  violence  done 
to  the  instincts  of  humanity  on  May  7th  is 
good  and  recuperative  for  the  world.  But 
it  would  be  more  recuperative  for  us  if  we 


SPIRIT  OF  GREAT  SHIPS     231 

could  rage  as  hotly  against  some  of  the 
damnable  things  we  do  ourselves. 

Now  the  nineteenth  century  offered,  as 
has  been  said,  a  prospect  toward  the  de- 
velopment of  a  kind  of  politics  capable  of 
keeping  the  law  constantly  within  speaking- 
distance  of  the  humanities.  It  was  possible, 
beginning,  say  at  about  1840,  to  evolve  a 
self-consistent  and  self-governing  system  of 
industry  and  finance  that  would  have  been 
in  effect  an  international  political  party, 
strong  enough  to  establish  a  universal  com- 
munity of  interest  and  to  keep  the  world's 
peace.  We  did  not  in  fact  do  anything  of 
the  sort.  We  refused  to  make  frank  politi- 
cal use  of  the  fine  and  spiritual  methods 
of  social  co-ordination  offered  by  the  in- 
vention of  credit-capital,  the  joint-stock 
company  and  the  instantaneous  diffusion  of 
news. 

We  allowed  these  modern  high-tensioned 
agencies  of  socialization  to  drift  into  the 
hands  of  a  class.  We  imagined  that  our  old- 


232         THE  GREAT  NEWS 

time,  low-tensioned  political  arrangements 
could  compel  that  class  to  be  social. 

The  mistake  was  immense,  and  egregious. 
There  is  a  possibility  that  the  dominant 
class  might,  of  their  own  motion,  have  de- 
veloped a  really  workable  international  busi- 
ness system  if  they  had  been  let  alone.  Cer- 
tainly no  powerful  class  has  ever  been  so- 
cialized by  compulsion.  And  certainly  the 
modern  business  system  is  of  so  sensitive 
and  organic  a  character  that  it  must  either 
socialize  itself  or  destroy  itself;  it  never  can 
be  socialized  from  the  outside. 

The  business  system  has  never  had  a  nor- 
mal day.  From  its  birth  its  vitality  has 
been  low.  But  when  the  narrow  prejudice 
and  stupidity  of  the  old  nationalistic  poli- 
tics began  to  press  hard  upon  its  body  in 
the  early  seventies,  the  business  system  be- 
gan to  spend  its  best  strength  in  combating 
and  conquering  the  public-power.  In  large 
part  the  business  system  ceased  to  be  a 


SPIRIT  OF  GREAT  SHIPS     233 

working  organization  and  became  a  fighting 
organization. 

It  came  to  pass  that  every  big  business 
concern  broke  in  two.  There  was  the  part 
that  had  all  the  practical  knowledge,  as- 
sembled all  the  skill  and  materials  and  did 
all  the  work;  and  there  was  the  part  that 
fought  for  the  franchises  and  the  markets. 
The  latter  part  sucked  the  life  out  of  the 
former  and  absorbed  the  large  salaries  and 
other  incomes.  The  department  that  mar- 
shalled men  and  tools  for  the  actual  produc- 
tion of  goods,  and  the  subjection  of  natural 
forces  and  materials  to  human  uses,  was 
overruled  by  a  department  that  was  igno- 
rant and  incompetent  in  such  matters,  being 
fully  absorbed  in  the  strategy  and  tactics  of 
a  gruelling  struggle  of  man  against  man 
and  group  against  group  to  win  sovereignty 
and  taxing-power  over  the  general  appara- 
tus of  civilization. 

Thus,  when  the  repeated  wireless  warn- 
ings came,  on  that  calm  night  in  the  North 


234.         THE  GREAT  XEWS 

Atlantic,  Captain  Smith  was  overruled  by 
a  bend  of  the  eyebrows  of  Mr.  Bruce  Ismay. 
That  was  a  ritual  and  pontifical  transaction 
— symbolical  of  many  things.  The  Titanic 
went  upon  the  ice.  And  also  there  were 
staggering  engines  everywhere  throughout 
the  industrial  world,  and  submergence  of 
many  lives — because  commercial  strategists 
had  taken  command  of  things  they  did  not 
understand,  and  had  turned  the  marvellous 
tools  of  a  machine-age  into  weapons,  to  bat- 
tle for  the  control  of  the  bank  and  the 
bourse. 

Out  of  that  struggle  of  market-men  and 
promoters  has  grown  another  struggle — 
not  more  devastating,  but  more  bloody. 
Probably  the  physical  violence  of  a  war  is 
somehow  accurately  proportioned  to  the 
moral  virulence  of  the  peace-conditions  that 
preceded  and  produced  it.  Given  then  the 
ethical  cross-purposes,  the  confounding  im- 
morality of  a  world-wide  circle  of  commerce 
practically  dominated  by  a  financial  power 


SPIRIT  OF  GREAT  SHIPS     235 

that  was  not  at  peace  with  any  people,  or 
with  itself,  and  that  used  governments  as 
counters  in  a  game  without  rules — it  should 
not  be  hard  to  understand  the  extremity  of 
violence  that  was  reached  on  the  7th  of  May, 
1915. 

Those  who  suppose  that  Machiavelian 
financiers  planned  the  course  of  this  war 
for  their  own  benefit,  are  misinformed. 
Nobody  planned  it.  Alas !  it  is  planless.  It 
is  driven  forward  by  a  blind  primordial  pas- 
sion of  race  and  nationality — because  men 
have  been  thrown  back  upon  the  instinct  of 
the  blood-bond,  to  escape  from  the  moral 
welter  into  which  they  have  been  plunged  by 
the  anarchy  of  industry  and  commerce. 
For  the  moment  there  is  no  law  but  the  law 
of  race — and  the  blind  superstition  of  sov- 
ereignty. There  is  no  law  of  nations — only 
a  law  of  the  frenzied  and  baffled  nation. 
And  that  is  the  fierce  Old  Testament  Law. 

It  is  a  round  two  thousand  years  behind 
the  times. 


236         THE  GREAT  NEWS 

Into  the  narrow  angle  of  this  atavistic 
hate  sailed  the  Lusitania — carrying  the  in- 
signia of  modernity,  herself  the  perfect  and 
special  type  of  the  kind  of  a  world  we  had 
meant  to  be,  a  world  of  sumptuous  science 
and  swift  communications,  of  universal  un- 
derstanding and  an  ecumenic  democracy  of 
tools.  The  word  Lusitania  had  become  a 
sign-word  for  the  thought  of  a  successful 
order  of  industry  and  commerce.  It  meant 
that  in  all  languages. 

So  when  this  ship  was  stung  to  death  by 
the  old  race-hate,  it  was  as  if  our  modern 
world  had  made  an  unwilling  and  costly 
oblation  that  marked  and  passed  the  limit 
of  our  obedience  to  the  old  Hebraic  race- 
god,  the  God  of  blood  and  iron. 

In  our  indignation  and  recoil  from  that 
sacrifice  there  is  hope  that  we  may  recover 
the  meaning  of  the  modern  spirit,  the  Spirit 
of  the  Great  Ships. 


XI 

SUMMARY 

WE  are  living  in  an  epoch — like  that  of 
the  sixteenth  century  Reforma- 
tion— in  which  all  things  flow.  The  inter- 
ests of  religion,  of  culture,  of  politics,  of 
business,  are  once  more  fused  into  a  simple 
and  all-containing  human  interest,  as  is  the 
case  in  all  transforming  epochs. 

In  laying  emphasis  herein  upon  the  or- 
ganization of  industry  and  commerce,  at- 
tention is  called  to  the  fact  that  business  has 
ceased  to  be  just  business.  It  has  absorbed 
the  connotations  of  religion,  culture  and 
politics — just  as  in  the  sixteenth  century  the 
problem  that  was  called  religious  became 
the  preoccupation  of  the  schools,  the  forum 
and  the  market-place. 

The  difference  of  emotional  interest  in 
the  two  periods  is  mainly  a  matter  of  lan- 

237 


238         THE  GREAT  NEWS 

guage.  In  every  age  of  grand-scale  read- 
justment mankind  pulls  itself  together, 
confounds  the  specialists,  and  tears  out  the 
partitions  of  life.  It  is  perceived  at  such 
times  that  faith,  and  fine  art,  and  civil  order, 
and  physical  well-being  are  really  insepa- 
rable— that  all  these  interests  decline  and 
decay  for  no  other  cause  but  the  stubborn, 
primordial  fanaticism  of  priests,  scholars, 
politicians  and  commercialists — who  sever- 
ally will  have  it  that  their  specialty  is  the 
top  or  bottom  of  human  existence. 

Religion  is  a  disease  when  it  is  tasteless, 
lawless  and  careless  of  food  and  raiment. 
Refinement  becomes  insensibility  when  it  is 
without  faith  and  when  it  refuses  to  concern 
itself  with  the  ordering  of  cities  and  with 
the  earth-struggle.  Even  so,  nothing  is  so 
impolitic  as  pure  politics,  or  so  uneconomi- 
cal as  mere  business. 

Thus  it  comes  to  pass  that  there  is  a 
chance  of  great  refreshment  in  earthquak- 
ing times  like  these,  when  the  card-castles 
of  all  the  social  professionals  are  shaken 


SUMMARY  239 

down,  and  books  can  be  written  that  cannot 
be  properly  catalogued  in  any  library. 

With  the  understanding  therefore  that 
business  involves  for  this  age  all  that  the- 
ology involved  for  the  reformers,  scholars, 
state-builders  and  guild-masters  of  the  six- 
teenth century — the  general  argument  of 
this  book  may  be  resumed  in  the  following 
propositions,  to  wit: 

That  the  rise  of  the  modern  business  sys- 
tem, when  looked  at  in  the  light  of  the  un- 
exampled events  that  have  happened  since 
the  1st  of  August,  1914,  appears  as  the  cen- 
tral and  all-correlating  fact  of  modern  his- 
tory. 

That  this  system,  in  its  normal  operation, 
is  a  political  novum  organum,  the  method  of 
an  inductive,  pragmatic  and  mobile  state — 
the  real  democracy  of  which  all  the  so- 
called  democracies,  antique  or  extant,  are 
only  a  faint  foreshadowing. 

That  this  new  thing  has  actually  imposed 
itself  upon  the  modern  world  and  is  now 


240         THE  GREAT  NEWS 

an  unescapable  reality — so  that  the  rejec- 
tion of  its  spirit,  leaves  its  body  working  in 
a  way  that  is  monstrous — entailing  domes- 
tic and  international  discord  and  a  world- 
wide confusion,  from  which  there  is  no  es- 
cape save  through  the  final  acceptance,  at 
its  full  value,  of  the  thing  that  has  been 
spiritually  rejected. 

That  the  operation  of  the  business  system 
is  most  abnormal  in  the  libertarian  coun- 
tries of  Western  Europe  and  America,  be- 
cause these  countries  have  failed  to  under- 
stand that  their  constitutional  defence 
against  the  arbitrary  authority  of  kings  is 
by  rights  only  a  means  and  opportunity  for 
the  setting  up  of  an  authority  that  is  not 
arbitrary ;  and  they  have  thus  been  left  with- 
out any  effectual  authority  at  all,  or  any 
defence  against  the  arbitrariness  of  an  un- 
social money-power. 

That  it  is  still  possible  for  the  United 
States — by  a  moral  and  intellectual  effort 
— to  rectify  this  error,  and  to  create  au- 
thoritative local  centres  of  democratic  con- 


SUMMARY  241 

trol,  that  shall  normalize  the  business  system 
and  thereby  confer  upon  this  country  such 
prosperity  and  strength  that  it  will  be  able 
to  hold  the  moral  and  material  hegemony  of 
the  world. 

That  if  we  will  not  make  the  effort  neces- 
sary for  the  achievement  of  first-rate  democ- 
racy we  must  do  as  England  and  France  are 
doing — must  erect  a  central  and  arbitrary 
power,  on  the  German  model,  to  stave  off 
plutocratic  anarchy. 

That  the  German  model  is  to  be  regarded 
as  a  half-way  genuine  or  second-rate  democ- 
racy, in  which  a  partial  escape  from  arbi- 
trary law,  with  internal  concord  and  a 
relatively  secure  development  of  the  useful 
arts  and  sciences,  is  purchased  at  the  price 
of  perpetual  commercial  and  military  ag- 
gression. 

That  the  making  over  of  all  the  great 
states  on  this  model  commits  the  world  to 
continuous  war,  which  cannot  end  until 
some  one  of  the  states,  endowed  with  excep- 
tional valiance  and  resisting  power,  shall  be 


242         THE  GREAT  NEWS 

subjected  to  such  continued  isolation  and 
pressure  that  all  arbitrariness  shall  be 
purged  out  of  it  and  it  shall  be  forced  to 
deploy  its  moral  and  material  reserves  in  the 
forms  of  a  pure  democracy. 

That  upon  the  emergence  of  such  a  de- 
mocracy— a  society  mobilized  under  the 
sole  authority  of  organized  intelligence,  for 
the  mastery  of  the  physical  difficulties  of 
spiritual  existence — wars  will  speedily  be 
brought  to  an  end;  since  such  a  society  be- 
ing freed  from  internal  contradictions  will 
be  endlessly  expansive  and  irresistibly 
strong. 

In  a  real  democracy  there  is  of  course  no 
such  thing  as  a  sovereign  government;  the 
sovereignty  is  lodged  in  the  free  and  unof- 
ficial associations  of  the  people.  The  con- 
tradiction that  rends  the  heart  of  modern 
states  is  the  irreducible  antagonism  between 
the  deductive  law-logic  of  sovereign  gov- 
ernments and  the  inductive  method  of  the 
industrial  and  commercial  order.  Thus  the 


SUMMARY  243 

business  system  would  be  entirely  at  home 
in  a  real  democracy  and  would  easily  adjust 
all  its  operations  to  the  agencies  of  demo- 
cratic government;  but  it  is  compelled  by 
the  very  nature  of  things  and  by  the  nature 
of  the  human  mind,  to  fight  against  sov- 
ereign government — by  ruse  or  violence.  It 
is  induced  to  betray  its  own  code  of  induc- 
tion and  experience,  and  it  passes  by  degrees 
to  the  extremes  of  anarchy. 

The  point  is  that  a  working  organization, 
because  of  its  close  contact  with  the  intrinsic 
laws  of  art  and  science,  is  obliged  to  pro- 
ceed somewhat  in  accordance  with  an  out- 
of-doors  code  of  morality,  the  spirit  of  which 
is  utterly  at  variance  with  the  in-doors  law 
of  sovereign  governments. 

We  have  been  tempted  into  an  easy  way 
to  effect  a  partial  solution  of  this  antago- 
nism. We  have  allowed  the  control  of  the 
out-doors  processes  to  drift  into  the  hands 
of  a  few  privileged  persons  of  conventional 
and  legalistic  spirit.  Thus  the  whole  work- 
ing apparatus  has  been,  after  a  fashion,  as- 


244          THE  GREAT  NEWS 

similated  with  the  government  through  the 
legal  fiction  that  the  very  rich  have  per- 
formed huge  works  of  supererogation  for 
the  public,  so  that  the  state  is  deeply  in  debt 
to  them  and  must  by  rights  expend  its 
strength  in  protecting  their  claims.  By  this 
means  the  natural  antagonism  between  the 
working  order  and  the  "higher"  order  of  ab- 
stract law  is  tentatively  mediated.  The 
whole  body  of  national  finance  or  industrial 
control  becomes  the  indefeasible  property  of 
a  supreme  creditor  class;  and  in  this  shape 
the  working  order  becomes  intelligible  to  the 
defenders  of  the  higher  order.  It  could  not 
otherwise  be  intelligible  to  them.  For  the 
high  legalists  cannot  think  dynamically  or 
outdoorwise.  They  can  recognize  only  ab- 
solute or  mathematical  rights. 

But  the  penalty  of  this  shifty  adjustment 
is  first,  that  it  makes  the  government  the, 
special  agent  of  the  creditor  class;  and 
second,  that  it  subjects  the  working  order  to 
an  administration  that  tends  indoorward. 
The  stupendous  and  delicate  machineries  of 


SUMMARY  245 

modern  civilization  clog  up  and  become  un- 
workable— for  the  practical  purpose  of  feed- 
ing, clothing  and  housing  people — as  the 
management  of  them  slips  gradually  out  of 
the  hands  of  scientific  organizers  and  tool- 
masters  and  into  the  offices  of  idlers  and 
usurers'  agents.  To  be  sure  the  academic 
spokesmen  of  this  class — who  are  them- 
selves sedentary  men  and  are  therefore  gen- 
erally capable  only  of  indoor-thoughts — 
can  see  no  reason  why  the  highest  possible 
efficiency  cannot  be  hired  by  a  leisure  class, 
at  the  lowest  market  rate  in  wage  and  salary. 
They  do  not  understand — and  perhaps 
could  not  be  made  to  understand — that  per- 
fection in  working  efficiency  could  be  at- 
tained only  under  conditions  that  yielded  to 
every  practical  organizer  or  worker  exactly 
as  much  discretionary  control,  or  virtual 
ownership,  over  tools  and  materials  as  be- 
fitted his  personal  skill  and  mental  prowess. 
There  is  no  question  here  of  dividing  up  the 
indivisible  apparatus  of  modern  industry. 
The  point  is  that  maximum  efficiency  in 


246          THE  GREAT  NEWS 

team-play  requires  that  there  should  be  no 
owners — which  is  a  lawyer's  word  for  con- 
trollers— except  those  that  play  the  game. 
It  follows  from  this  consideration  that  every 
transplacement  of  ownership  or  control 
from  the  artisans,  engineers  and  practical 
organizers,  to  people  who  stand  outside  the 
creative  process — must  be  registered  in  a 
diminished  use-value  of  the  out-put. 

As  the  quantity  or  quality  of  the  product 
declines  by  this  process  society  grows  poorer. 
But  the  progressive  impoverishment  is  cov- 
ered up  by  a  parading  of  the  very  docu- 
ments that  prove  it.  The  immense  accumu- 
lation of  stocks,  bonds  and  various  deben- 
tures that  show  how  great  has  been  the  dis- 
placement of  industrial  control  from  the 
hands  of  the  competent,  and  how  grievously 
the  efficiency  of  the  working  process  has 
been  impaired — is  exhibited  with  pride  by 
the  commercial  statisticians  as  evidence  of 
prosperity  and  social  wealth. 

It  is  quite  true  of  course  that  where  there 
is  such  mighty  levy  of  unearned  incomes 


SUMMARY  247 

there  must  be  a  considerable  body  of  real 
and  valuable  tools  and  materials — to  stand 
the  strain.  But  the  statisticians  need  to  be 
reminded  that  when  one  holds  a  ten-thou- 
sand-dollar mortgage  on  a  five-thousand- 
dollar  farm,  it  is  not  likely  to  be  a  good 
farm,  or  a  good  mortgage.  And  if  by  dint 
of  much  legal  pressure  upon  the  farmer  and 
his  hired  hands — to  the  detriment  of  agri- 
culture— it  is  possible  to  exact  as  much  as 
half  the  interest-money,  and  if  then  the 
other  half  is  carried  over  and  added  to  the 
face  of  the  mortgage-debt — we  should  not 
say  that  riches  are  accumulating.  Yet  this 
is  a  true  parable  of  the  swelling  wealth  of 
the  United  States  and  of  many  modern  na- 
tions. 

It  is  not  intended  here  to  argue  against 
the  legitimacy  of  interest-taking  by  people 
who  have  earned  their  leisure,  but  only  to 
show  that  when  a  modern  business  system 
develops  under  the  segis  of  an  in-door  gov- 
ernment and  under  the  almost  exclusive  con- 
trol of  a  creditor  class,  it  passes  by  an  evolu- 


248         THE  GREAT  NEWS 

tion  that  is  quite  natural  and  inevitable — 
through  a  series  of  convulsions  and  heart- 
failures  like  those  of  1893  and  1907,  and  a 
supervening  period  of  chronic  prostration 
— to  a  point  where  nothing  but  war  can 
make  it  work  at  all. 

The  war  toward  which  all  nations  with 
sedentary  business  systems  are  necessarily 
driven,  need  not  in  the  beginning  involve 
the  use  of  fire-arms,  for  there  are  other  ways 
of  doing  physical  harm  to  foreigners  and 
appropriating  their  goods.  The  necessary 
war  may  be  said  properly  to  begin  when  the 
creditor-class  discovers  its  inability  to  make 
the  wheels  go  'round  within  the  limits  of  a 
dead-locked  domestic  economy,  and  deter- 
mines to  make  use  of  the  government  to 
open  foreign  fields  of  exploitation. 

The  government  in  the  ordinary  case  is 
nearly  powerless  to  resist.  For  this  stage  is 
reached  only  after  the  gradually  increasing 
pressure  of  plutocracy  has  enfeebled  the 
mentality  of  the  press,  the  schools,  the 


SUMMARY  249 

church  and  all  other  organs  of  opinion,  to 
such  an  extent  that  wise  men  are  driven  into 
corners  and  collective  counsels  of  restraint 
have  become  extremely  difficult  if  not  im- 
possible. 

Nothing  short  of  the  intellectual  valor  of 
a  Stein  or  a  Burke  yoked  to  the  social  en- 
thusiasm of  a  Mazzini  or  a  Lamennais — 
could  possibly  avail  to  stem  the  drift  of  the 
crowd-fatalism  that  thralls  the  people  in  all 
matured  plutocracies.  For  in  such  coun- 
tries if  a  man  has  come  to  a  place  of  high 
consideration  and  leadership  in  any  of  the 
professions  his  mind  has  generally  been 
shaped  in  the  process  to  nice  conformity 
with  the  pecuniary  standards  that  prevail, 
so  that  he  is  ready  in  pure  conscience  to 
condemn  as  visionary  any  proposal  that  has 
an  open-air  odor  or  that  the  run  of  desk-men 
disapprove. 

Moreover,  it  should  be  carefully  noted 
that  a  vigorous  and  belligerent  foreign  pol- 
icy does  actually  present  a  prospect  of  so- 
cial relief — and  that  by  the  shortest  course. 


250         THE  GREAT  NEWS 

The  relief  is  both  mental  and  physical.  For 
no  scene  of  carnage  is  so  depressing  as  is 
the  peace  of  plutocracy.  And  in  the  out- 
flinging  of  the  national  banner  toward  the 
far  seas,  in  quest  of  foreign  exploitations, 
there  is  a  mental  exhilaration  that  is  dimly 
felt  even  by  the  mill-drudges  and  the  out- 
of-works.  As  for  the  solid  physical  ad- 
vantage, the  fact  is  that  plutocratic  coun- 
tries that  have  come  to  their  logical  dead- 
lock at  home  and  have  reached  their  maxi- 
mum of  endurable  misery,  do  really  stand  a 
fighting-chance  of  raising  their  domestic 
standard  of  living,  by  the  pursuit  of  foreign 
markets  and  investments  at  the  cannon's 
mouth.  Anyhow,  fight  they  must  or  perish' 
by  the  sword — when  once  they  have  definite- 
ly committed  their  fortunes  to  the  fatal  and 
inflexible  logic  of  the  inverted  business-sys- 
tem. 

Those  who  believe  in  a  just  God  and  a 
moral  governance  of  the  world  are  able  to 
infer  from  these  irrefutable  realities  that 


SUMMARY  251 

the  world  is  now  caught  and  held  in  the  ever- 
lasting arms  as  in  a  vise — for  reasons  that  do 
not  end  with  the  great  tribulation.  But  as 
in  a  vise  the  world  is  surely  caught.  In  re- 
fusing to  take  seriously  the  apocalyptic 
promise  of  a  new  and  creative  social  order 
that  came  with  the  rise  of  the  great  industry 
and  commerce  of  the  nineteenth  century, 
we  have  made  of  the  thing  that  could 
have  saved  us,  an  instrument  of  ineluctable 
pain. 

Thus,  to  proceed  with  the  description  of 
what  plainly  lies  before  us  on  the  path  we 
seem,  up  to  this  moment,  to  have  chosen,  it 
is  to  be  observed  that  the  libertarian  coun- 
tries— the  countries  of  unbridled  ballot-box- 
ing, governmental  Icdssez  faire  and  Man- 
chester economics — are  in  their  present 
shape,  particularly  unfit  for  these  times. 
England,  France,  Italy  and  the  United 
States,  as  has  been  said,  must  all  be  made 
over,  somewhat  on  the  German  model — in 
order  to  survive  long  enough  to  have  a  fair 


252         THE  GREAT  NEWS 

fighting  chance  with  Germany  and  the  rest 
— in  wars  of  reciprocal  subjugation. 

The  saving  characteristic  of  the  German 
system  is  of  course  the  existence  in  it  of  a 
transcendental  or  super-rational  social  au- 
thority that  plutocracy  dare  not  override. 
Under  the  shelter  of  such  an  authority  it  is 
possible  to  accomplish  real  social  reforms, 
to  lift  the  minimum  standard  of  living  some- 
what above  the  dead  line  and  to  realize  a  far 
higher  degree  of  economic  democracy  than 
is  possible  in  any  of  the  countries  like  our 
own,  that  have  no  social  authority  at  all. 

Under  the  regime  of  modern  business,  in 
countries  that  have  refused  to  be  really 
democratic,  civil  wars  can  be  averted  only 
by  reversion  toward  autocracy.  In  default 
of  democratic  local  centres  for  the  rally- 
ing of  the  forces  of  humanity  and  sci- 
ence, a  strong  central  government  can  be 
made  to  serve  as  a  pis  oiler  and  can  furnish 
a  tolerably  effectual  check  to  the  arbitrary 
powers  of  egotistic  finance.  It  fell  to  Bis- 
marckian  Germany  to  lead  the  universal  re- 


SUMMARY  253 

action  that  was  necessitated  by  the  general 
lapse  of  faith  in  real  democracy.  Given  the 
lapse  of  faith  and  the  consequent  menace  of 
universal  anarchy  through  the  unlimited 
sway  of  an  unsocial  and  unscientific  capi- 
talism— the  reaction  was  altogether  wise. 
Its  practical  effect  in  Germany  has  been  to 
provide  a  milieu  for  the  development  of  a 
comparatively  social  and  scientific  indus- 
trial system.  It  is  true  that  this  system 
cannot  possibly  diffuse  itself  through  the 
world  under  imperial  auspices,  and  there- 
fore cannot  possibly,  in  its  present  form, 
furnish  a  ground  for  international  concord. 
But  it  forces  into  the  reluctant  mind  of  the 
race  the  idea  that  humanized  and  scientific 
business  is  not  a  dream  of  visionaries,  but 
the  solid  base  of  fighting -power,  as  well  as 
of  working-power. 

It  is  not  yet  generally  understood — but 
no  doubt  it  soon  will  be — that  the  German 
business  system  is  scientific  and  socially  ef- 
ficient only  so  far  as  it  is  self-governing. 
From  Germany  the  lesson  is  to  come  that  all 


254,         THE  GREAT  NEWS 

the  positive  excellence  and  social  service- 
ableness  of  a  business  system  must  be  gen- 
erated spontaneously  from  within  the  body 
of  the  system  itself — that  a  strong  political 
government  can  do  nothing  more  than  clear 
the  ground  for  industrial  freedom  and  self- 
control.  An  autocracy  can  check  and  re- 
press an  unsocial  business  system  but  can- 
not socialize  it.  Even  so  a  bad  business  sys- 
tem can  be  arrested  and  slowed  down  by 
act  of  Congress — and  may  richly  deserve  to 
be — but  a  good  business  system  must  be 
autonomous.  To  suppose  otherwise  is  to 
misconceive  the  nature  of  the  industrial  and 
commercial  process.  The  people  that  do  the 
work  must  govern  the  working-system. 
The  business  organization  must  originate 
motives  of  science  and  socialization  in  terms 
of  enterprise,  and  must  develop  within  its 
own  organism  the  nerve-ganglia  of  self- 
control. 

Thus  the  excellence  of  the  German  work- 
ing order  lies  in  the  fact  that  it  is  penetrated 


SUMMARY  255 

by  a  passion  for  doing  things  right.  It  is 
controlled  by  a  reticulation  of  autonomous 
— yet  interdependent  and  mutually  respon- 
sible— cartels,  trade-councils  and  local  ad- 
visory boards.  The  system  is  somewhat 
formless  and  illogical  and  it  offers  no  gen- 
eral plan  of  action  that  is  worthy  of  Ameri- 
can imitation.  The  point  is  that  the  Ger- 
man business  system  is  at  bottom  demo- 
cratic. To  a  German,  accustomed  as  he  is 
to  the  co-operation  of  all  concerned  in  any 
settlement  of  trade-standards,  our  own 
methods  of  trust-control,  railroad  rate-reg- 
ulation and  so  on,  seem  intolerably  arbi- 
trary and  autocratic. 

No  one  commanding  a  universal  audi- 
ence, has  risen  up  in  Germany  to  expound 
the  meaning  of  the  Great  Agony  of  the 
German  people  in  its  bearing  upon  the  re- 
demption of  the  human  race.  Yet  under- 
neath the  narrow  ethnic  feeling,  the  illiberal 
pride  of  blood  and  racial  tradition  which  is 
as  strong  in  Germany  as  anywhere  else, 


256         THE  GREAT  NEWS 

there  is  moving  in  that  land  a  world-reaching 
power  of  peace  and  reconciliation.  It  seems 
to  be  the  present  mission  of  Germany  to 
be  strong,  and  to  convey  to  the  world  the 
secret  of  strength. 

We  talk  here  in  America  of  prepared- 
ness for  war.  But  we  may  learn  from  Ger- 
many that  military  power  is  merely  a  spe- 
cial phase  or  function  of  industrial  power. 
It  should  be  plain  from  the  experience  of 
England  that  as  matters  stand  in  the  mod- 
ern world,  there  is  not  much  power  in  ar- 
mies that  are  superposed  upon  a  plutocratic 
industrial  order.  Thus  it  is  idle  to  suppose 
that  the  United  States  can  develop  an  ef- 
fective military  organization  on  the  eco- 
nomic basis  supplied  by  our  incompetent 
business  system.  If  we  shrink  from  the  task 
of  making  our  business  thoroughly  self- 
governing,  we  must  make  haste  to  realize  at 
least  a  sheltered  and  limited  industrial 
democracy  on  the  German  plan.  To  talk 
as  we  do  of  fighting  for  democratic  princi- 
ples accentuates  the  fact  that  our  democ- 


SUMMARY  257 

racy  is  somewhat  in  the  air — that  it  is  a 
fine  flag  waving  over  our  heads  but  has 
nothing  to  do  with  our  day's  work.  It 
would  be  finer  if  we  were  able  to  say:  "We 
are  dangerous  to  the  enemies  of  liberty  be- 
cause of  the  democratic  principles  that  gov- 
ern our  ordinary  business.  We  do  not  need 
to  fight  for  them.  They  are  our  strength. 
They  fght  for  us." 

Mr.  H.  G.  Wells  chants  an  elegy  over  the 
failure  in  this  war,  of  what  he  calls  democ- 
racy. But  democracy  has  never  failed  in 
war — and  cannot  fail.  For  democracy  is 
that  mode  of  human  association  of  which 
the  very  essence  is  that  it  mobilizes  the  maxi- 
mum of  force.  Democracy  is  deliverance 
from  the  rule  of  the  feeble.  It  takes  the 
control  of  arms  and  tools  out  of  the  hands 
of  those  who  love  idleness  and  hate  work, 
those  who  love  glory  and  hate  danger.  It  is 
the  world's  final  abandonment  of  all  those 
devious  devices  of  political  sophistry  and  le- 
gal fiction  whereby  power  has  been  imputed 


258         THE  GREAT  NEWS 

to  the  powerless  and  the  engines  of  peace  and 
war  have  been  delivered  over  into  the  hands 
of  those  who  do  not  understand  them. 

The  test  of  democracy  is  this:  Do  men 
have  control  of  physical  forces  and  materials 
in  proportion  to  their  ability  to  manage 
them?  A  people  that  answers  this  test  is  as 
strong  as  it  can  possibly  be.  War  there- 
fore cannot  destroy  democracy. 

But  democracy  can  destroy  war.  And 
that  infallibly  it  will  do — whether  in  a  fu- 
ture that  is  near  or  remote.  For  under  the 
regime  of  democracy  the  most  formidable 
nation  is  sanest  and  most  pacific. 

The  ring  of  fire  that  has  been  drawn 
about  the  German  people  has  burnt  up 
much  that  was  bad  and  weak  in  it.  Indeed 
it  is  a  marvellous  paradox — this  emergence 
of  power  through  suffering!  Whether  it  be 
in  Germany  or  in  America,  the  metalling  of 
an  invincible  democracy — fit  to  destroy 
all  the  plutocracies  in  the  world — is  likely 
to  come  through  pressure  and  fire. 


SUMMARY  259 

Of  course  it  is  not  by  conquest  but  by 
contagion  that  this  power  will  take  posses- 
sion of  the  earth.  For  the  great  wars  are 
won  by  endurance — by  being  unkillable. 

If  history  had  not  been  somewhat  cheated 
of  her  rights  there  would  be  no  doubt  about 
it — it  would  be  from  the  United  States  and 
not  from  Germany  that  the  originating  im- 
pulse of  this  renewal  would  come.  And 
even  as  matters  stand  Germany  is  not  well 
constituted — with  her  intense  particularism 
and  her  heavy  burden  of  dynastic  and  feud- 
al customs, — to  be  the  land  of  the  universal 
cross-roads,  the  centre  of  a  world-regenera- 
tion. The  United  States  is  by  rights  the  na- 
tion of  many  nations,  the  supra-national 
country,  the  land  from  which  the  spacious 
recuperative  plans  of  the  twentieth  century 
would  best  proceed. 

Here  is  the  conclusion  of  the  whole  mat- 
ter: 

There  are  in  the  world,  and  always  have 
been  within  historic  times,  dynamic  socie- 


260         THE  GREAT  NEWS 

ties  and  static  societies.  All  that  is  inter- 
esting and  important  to  history  has  been  ac- 
complished by  the  former. 

The  difference  between  the  two  is  that  the 
dynamic  societies  pour  the  energy  of  their 
idealism  into  material  things,  while  the 
others  regard  the  mastery  of  materials  as  of 
less  importance  than  the  maintenance  of 
vested  rights.  It  has  been  found  that  the 
high-spirited  materialism  of  the  dynamic 
peoples  gives  them  light  and  grace  and  a 
degree  of  equity  and  unity.  On  the  other 
hand  the  refusal  of  the  static  societies  to  in- 
vest their  romance  in  material  things,  results 
in  a  moral  and  intellectual  deterioration  and 
the  eventful  predominance  of  an  insensitive 
plutocracy. 

Now  the  rise  of  the  modern  business  sys- 
tem, with  its  delicate  and  powerful  agencies 
of  social  correlation  and  control,  has  pre- 
cipitated an  epochal,  perhaps  a  final,  strug- 
gle between  the  dynamic  and  the  static  or- 
der— a  war-period  in  which  the  former 
must  soon  or  late  prevail.  This  prevalence 


SUMMARY  261 

is  made  the  more  probable  because  of  the 
fact  that  the  categories  of  modern  business 
are  entirely  congenial  to  a  dynamic  political 
order,  but  are  seen  to  work  confusion  and 
enfeeblement  when  applied  to  a  regime  of 
static  politics. 

It  is  indeed  conceivable  that  these  ideas, 
credit  and  free  contract  and  the  cognate 
mental  habits  of  large-scale  industry  and  ex- 
change— though  they  offer  the  best  and 
most  hopeful  means  of  universal  concord 
that  have  come  to  the  world  within  a  thou- 
sand years — may  somehow  be  utterly  ob- 
literated from  the  minds  of  men,  and  that 
we  may  thus  be  thrown  back  for  security 
upon  the  social  conceptions  of  an  earlier 
time.  But  if  the  business  system  survives  at 
all,  it  will  now  achieve  its  self-consistency 
and  normal  strength  in  one  or  other  of  the 
great  dynamic  societies,  and  will  evince  a 
power  over  materials  so  unprecedented  and 
incomparable  that  the  plutocracies  cannot 
stand  in  the  presence  of  it. 

The  nations  now  so  distraught  by  inter- 


262         THE  GREAT  NEWS 

nal  discords  and  depressed  by  the  poverty  of 
the  multitude,  will  enter  into  a  new  and  spa- 
cious age  of  art  and  the  free  spirit,  com- 
pelled by  the  irresistible  pressure  of  a  new 
kind  of  competition,  to  wit :  a  rivalry  among 
the  several  communities  of  the  earth  to  make 
goods  cheap  and  men  dear. 


THE  END 


APPENDIX 

THE  CARTEL  PRINCIPLE 

In  industry,  competition;  in  commerce,  socialization 
— that  is  the  principle  of  the  cartel. 

This  principle  has  nowhere  been  thoroughly  worked 
out  as  yet.  There  is  no  country  and  no  considerable 
community  that  has  deliberately  undertaken  to  subj  ect 
the  bulk  of  its  buying  and  selling  to  an  organized  and 
authoritative  social  intelligence — with  the  clear  pur- 
pose of  avoiding  the  waste  and  disorder  of  market 
rivalry,  and  thus  increasing  the  energy  of  the  produc- 
tive process.  Yet  as  a  matter  of  social  philosophy 
the  argument  is  all  in  favor  of  a  thorough-going  ap- 
plication of  this  principle. 

Industry — the  operation  of  farms,  mines  and  fac- 
tories— is  the  means  whereby  the  natural  difficulties 
of  existence  are  progressively  met  and  mastered.  In 
industry  the  sharper  the  competition,  the  swifter  the 
advancement  of  the  practical  arts.  On  the  other 
hand,  the  private  competitions  of  commerce  (Note 
that  the  running  of  railroads  and  steamships  is  not 
a  part  of  commerce,  but  of  industry)  are  a  dead  loss 
to  society  at  large. 

The  old-fashioned  economists — Adam  Smith,  Jere- 
my Bentham,  Stuart  Mill — were  right  enough,  with 
263 


264  APPENDIX 

their  government-hands-off  policy,  as  long  as  the  ways 
of  commerce  were  very  simple  and  every  producer 
might  be  thought  of  as  coming  to  market  with  his 
goods  in  his  hand.  Under  the  craftsman-economy, 
before  there  were  any  large  industrial  plants  or  any 
wide  commercial  combinations,  it  could  reasonably  be 
assumed  that  the  general  intelligence  of  the  buyers 
in  the  market-place — though  that  intelligence  was  dif- 
fused and  unorganized — might  be  sufficient  to  ap- 
praise things  at  something  like  their  real  value,  resist 
extortion  and  force  the  industrials  to  do  their  best. 
The  old  theory  of  free  market  competition  worked 
well  enough,  so  long  as  this  diffused  and  unorganized 
intelligence  was  fairly  equal  to  its  task.  It  ceased 
to  work  well  enough  from  the  moment  producers  and 
sellers  began  to  make  large-scale  combinations.  From 
that  moment  a  tendency  set  in  that  was  socially  sui- 
cidal— namely,  a  war  for  the  mastery  of  the  market. 

Matters  came  at  length  to  such  a  pass  that  a  given 
unit  of  mental  energy  applied  to  commercial  organi- 
zation for  the  control  of  the  market  was  found  to  pay 
better  than  when  applied  to  industrial  organization 
for  the  control  of  tools  and  materials.  Hence  came 
the  various  phases  of  industrial  deadlock  and  stagna- 
tion, the  decline  in  the  purchasing-power  of  a  day's 
work  and  the  general  rise  in  the  cost  of  living.  For 
there  can  be  no  substantial  progress  in  a  country  that 
offers  higher  rewards  for  effort  spent  in  selling  things 
than  for  effort  spent  in  making  them. 

Now  what  is  the  remedy  for  this  inverted  state  of 


APPENDIX  265 

affairs  that  has  followed  upon  the  failure  of  the  dif- 
fused and  unorganized  intelligence  of  the  market- 
place to  meet  the  requirements  of  grand-scale  indus- 
try and  commerce?  The  remedy  is  to  organize  this 
intelligence  and  give  it  point  and  power. 

The  idea  must  be  firmly  grasped  that  industry  and 
commerce  are  different  and  contrasting  processes.  The 
part  of  industry  is  to  establish  relations  between  man 
and  nature;  the  part  of  commerce  is  to  establish  re- 
lations between  man  and  man.  This  latter  is  a  so- 
cial function  and  should  be  treated  as  such. 

In  casting  about  to  find  a  practical  method  for  sub- 
jecting the  market  to  social  control,  we  naturally  ex- 
pect that  a  matter  of  such  importance  must  have 
forced  itself  upon  people's  attention  in  many  ways, 
and  must  have  been  dealt  with  tentatively  in  many 
places.  Accordingly  one  takes  note  of  such  social 
arrangements  as  those  that  have  been  worked  out  by 
the  citrus-fruit  growers  of  southern  California,  and 
like  experiments  in  the  United  States  and  elsewhere. 
But  perhaps  the  fullest  development  of  the  princi- 
ple— though  still  tentative  enough  and  with  a  defec- 
tive sense  of  social  obligation — is  seen  in  the  system 
of  cartels  that  has  woven  a  network  of  commercial 
regulation  across  the  face  of  Germany. 

The  German  cartel  is  a  combination  of  a  number 
of  industrial  concerns  that  have  agreed  to  market 
their  goods  in  common — whilst  continuing  to  compete 
with  one  another  for  the  improvement  of  industrial 
methods.  The  German  cartel  has  many  forms  and 


266  APPENDIX 

complications,  but  in  general  terms  it  is  a  joint-stock 
company  in  which  the  representatives  of  a  number 
of  firms  form  together  a  Central  Board  or  trustee- 
ship for  the  administration  of  their  common  commer- 
cial interests.  Each  concern  is  left  free  to  manage 
its  own  technical  plant  in  its  own  way.  The  Central 
Board  looks  out  upon  the  market,  estimates  the  total 
demand  for  a  given  season,  apportions  to  each  firm 
its  proper  share  of  the  output  and  markets  the  whole 
stock  as  general  selling  agent.  Accounting  is  made 
to  the  several  concerns,  with  special  allowances  or 
deductions  in  cases  where  more  or  less  than  the  al- 
lotted amount  has  been  contributed.  The  association 
is  temporary;  it  must  be  renewed  or  dissolved  at  the 
end  of  a  fixed  period. 

Now  although  the  German  cartel  system  is  a  mat- 
ter of  private  arrangement  and  not  an  affair  of  state, 
it  has  been  generally  accepted  by  economists  and  by 
German  courts  and  legislatures  as  a  socially  service- 
able thing.  Its  partial  elimination  of  the  disorder 
and  waste  of  commercial  competition  and  the  stimulus 
it  gives  to  technical  advance  are  points  of  such  ad- 
vantage to  the  public  that  the  occasional  excesses  and 
extortions  of  the  system  have  been  excused. 

An  English  economist,  Mr.  D.  H.  Macgreggor, 
comments  to  the  advantage  of  Germany  on  the  demo- 
cratic character  of  this  system  in  contrast  with  Amer- 
ican combinations.  He  says :  "It  is  in  the  great  Re- 
public that  economic  despotism  is  represented  by  the 
Trust  and  it  is  under  a  very  strong  despotism  that  the 


APPENDIX  267 

representative  government  of  industry  is  maintained 
by  the  Cartel." 

But  one  must  look  beyond  the  German  cartel  for 
a  full-orbed  expression  of  the  democratic  spirit  in 
business;  and  it  is  after  all  likely  to  be  in  the  United 
States  that  such  an  expression  will  ultimately  be 
found. 

Eeal  democracy  requires  that  the  common  market- 
agency  shall  act,  not  in  the  interest  of  a  group,  but 
of  the  whole  community;  and  that  the  price  paid  by 
the  community  shall  be  the  lowest  that  consists  with 
general  living  standards. 

It  is  conceivable  that  such  an  entire  democratiza- 
tion of  the  cartel  principle  might  be  realized  in  this 
country  by  the  sheer  statesmanship  or  inspired  so- 
cial sense  of  "big  business"  men.  It  is  thinkable 
that  the  producers  of  steel  or  oil  or  sugar  might  create 
a  general  marketing  agency  as  scientific  and  social  in 
its  aim  as — say,  for  example — an  institute  of  marine 
engineers,  or  that  spirited  guild  of  commercial  audi- 
tors in  London  whose  unpurchasable  professionalism 
is  the  terror  of  all  corporate  malfeasance.  Certainly 
it  is  only  a  high  and  proud  spirit,  the  spirit  of  science 
and  the  arts — and  not  the  dread  of  legal  penalties — 
that  can  permanently  sustain  any  fit  organ  of  social 
appraisement  and  market-control. 

It  must  be  admitted  that  there  are  no  present  signs 
that  such  an  organ  will  be  spontaneously  generated 
in  the  steel,  oil  or  sugar  business.  Indeed  the  legal 
obstacles  are  great.  Besides,  it  is  the  present  habit 


268  APPENDIX 

of  the  country  to  look  to  the  government  for  initia- 
tive in  such  matters. 

Now  it  happens  that  the  government  at  Washing- 
ton is  at  this  moment  confronted  with  the  urgent 
question:  "How,  under  the  anti-trust  laws,  shall  in- 
dustrial concerns  that  compete  in  the  home  market, 
manage  to  combine  for  foreign  trade?" 

It  appears  that  here  is  an  opening  for  an  applica- 
tion of  the  cartel  principle  on  a  line  of  minimum  re- 
sistance. In  considering  the  form  that  such  an  ex- 
periment might  take  one  should  observe  those  forms 
of  the  cartel  in  Europe  that  have  proceeded  from 
governmental  initiative.  Thus  in  Austria,  France  and 
Italy  the  governments  have  cartelized  the  tobacco 
trade — mainly  for  the  sake  of  public  revenue.  The 
Rumanian  government  has  created  an  oil  cartel — to 
conserve  the  petroleum  supply.  And  the  Italian  gov- 
ernment has  cartelized  the  sulphur  industry  of  Sicily 
for  a  similar  reason. 

It  is  perhaps  possible  for  the  government  of  the 
United  States  to  learn  something  from  such  prece- 
dents, and  then  to  pass  far  beyond  them  all — by  set- 
ting up  a  public  buying-and-selling  agency,  say  for 
the  Latin-American  trade.  Such  an  agency  should 
no  doubt,  in  the  first  instance,  confine  itself  to  staple 
products  that  can  be  standardized,  and  so  appraised 
by  quantity  rather  than  by  quality — such  as  steel 
rails,  copper  wire,  oatmeal  and  so  on.  The  public 
agency  could  take  the  measure  of  the  foreign  market 
and  buy  from  the  home  producers  in  that  measure — 


APPENDIX  269 

not  from  "insiders/'  as  is  the  case  in  the  German 
system,  but  from  the  lowest  bidders.  The  sales  abroad 
would  generally  be  made  at  a  uniform  price.  And 
there  would  be  a  margin  of  profit  left  for  the  main- 
tenance of  the  agency  and  to  pay  the  public  costs 
incurred  through  an  extension  of  the  consular  service 
and  through  our  actual  employment  of  Commerce  De- 
partment officials — who  are  in  effect  travelling  public 
salesmen  on  the  lookout  for  new  markets. 

It  is  worth  considering  also  whether  the  cartel  prin- 
ciple might  not  be  applied  to  the  development  of  an 
American  merchant  marine.  Ocean  transportation  is, 
of  course,  a  commodity — to  be  bought  and  sold  like 
any  other.  A  government  agency  for  the  comprehen- 
sive purchase  and  sale  of  this  commodity  could  ex- 
clude from  the  competition  all  ships,  whether  of  for- 
eign or  domestic  registry,  that  did  not  comply  with 
the  terms  of  a  proper  Seaman's  Bill,  could  give  a 
distinct  preference  to  American  ships  and  could  main- 
tain a  rate-scale  that  would  pay  American  ship-mas- 
ters to  get  ships  and  sail  them. 

Finally  it  should  be  noted  that  it  is  possible  for 
the  government  to  use  the  cartel  principle  in  creating 
a  gigantic  engine  of  finance  for  the  support  of  the 
fiscal  budget. 

WHY  GERMANY  IS   UNSTARVABLE 

The  reason  why  it  is  difficult  to  the  point  of  im- 
possibility to  enlist  the  forces  of  Famine  against  the 


270  APPENDIX 

Teutons  is  the  existence  of  the  invincible  hunger- 
conquering  and  national  life-saving  army  of  German 
farmers  organized  under  the  democratic  standard  of 
the  Landwirtschaftsrat.  It's  a  tough  word  for  a 
tough  thing.  It  means  in  plain  English,  Council  of 
Agriculture.  There  is  a  similar  organization  in  Aus- 
tria, with  the  still  more  terrible  title — Landwirt- 
schaftsgesellschaft. 

Of  late  the  legend  has  been  spread  abroad  and 
carefully  nurtured  by  newspapers  that  the  Teutons 
are  formidable  because  they  are  not  free.  It  is  a 
curious  doctrine,  and  it  reveals  much  concerning  the 
mentality  of  those  who  in  simple  faith  accept  it.  It 
is  pretended  that  Germany  is  a  marvellous  mechanism 
worked  by  strings.  And  that  the  strings  are  in  the 
hands  of  irresponsible  and  vainglorious  persons  who 
pull  and  haul  to  please  their  own  whims. 

Now  from  the  times  of  Livy  and  Tacitus  the  case 
of  the  Teuton  has  in  fact  been  quite  otherwise.  He 
has  always  been  a  great  fellow  for  councils.  He  has 
stickled  for  it,  that  every  clod-hopper  should  have 
his  say.  And  the  natural  modern  outcome  of  those 
ancient  village  communings  and  witenagemotes  is  his 
unstarvable  Landwirtschaftsrat,  or  permanent  nation- 
al session  of  the  feeders. 

It  is  not  in  Germany — rather  in  England,  France 
and  the  United  States — that  farmers  are  helpless  folk 
whose  fortunes  are  worked  by  strings.  In  London  or 
Paris,  in  Chicago  or  New  York  a  real  farmer  is  as 
foreign  to  the  wheat-pit  or  the  produce-exchange  as  a 


APPENDIX  271 

Yankee  at  the  court  of  King  Arthur.  In  these  great 
capitals  are  centred  the  delicate  and  admirable  re- 
ticulations of  finance  and  commerce  which  deal  with 
farmers  in  dispassionate  aloofness — as  spiders  deal 
with  flies. 

In  Berlin,  on  the  other  hand,  there  is  a  representa- 
tive and  democratic  institution  which  sees  to  it  that 
every  husbandman  shall  have  political  weight  in  the 
Empire  and  financial  power  at  the  bank — in  propor- 
tion to  the  actual  social-use-value  of  his  poultry,  goose- 
berries and  sugar-beets. 

This  Berlin  institution  is  the  culmination  of  a  pyra- 
midal structure  reaching  down  through  the  political 
divisions  that  correspond  with  our  states  and  counties 
to  a  kind  of  permanent  political  primary  of  agricul- 
tural science  and  commerce  that  operates  without  in- 
termission in  every  country  town.  The  headquarters 
in  Berlin  is  a  big  building — say  eighty  by  two  hun- 
dred feet,  and  half  a  dozen  stories  high.  Here  are 
lodged  a  great  variety  of  agencies  that  correlate  in 
the  idea  of  a  national  Market  and  Clearing-house  of 
agricultural  products.  If  there  is  an  orchardist  in 
Hesse-Darmstadt  with  more  pears  or  peaches  than  he 
can  sell  around  home,  he  tells  his  troubles  to  the 
Frankfort  office;  and  if  the  whole  Frankfort  jurisdic- 
tion is  overstocked  with  these  goods,  the  word  goes  on 
to  Berlin  with  its  all-comprehensive  market-horizons. 
Even  so  if  some  gardener  in  Saxony  has  invented  a 
new  and  more  excellent  way  of  tying  asparagus,  the 


272  APPENDIX 

whole  country  is  apprised  of  the  fact  by  the  quickest 
routes. 

But  the  Landwirtschaftsrat  deals  also  with  the 
weightiest  matters — holding  on  behalf  of  the  funda- 
mental life-sustaining  interests  of  the  country  that 
balance  of  political  and  social  power  that  the  ancient 
Gracchi  strove  to  hold.  The  seventy-two  councillors 
who  represent  the  Landwirtschaftsrat  in  Berlin  con- 
sult with  the  Reichstag  on  all  matters  that  concern 
the  agricultural  interests;  and  their  advice  goes  into 
the  Legislature  of  the  Empire  with  a  massed  politi- 
cal force  that  is  not  easily  resisted. 

The  whole  system  may  be  described  as  semi-official. 
The  law  defines  the  general  modes  of  its  organization 
and  action.  But  the  action  is  free  and  democratic, 
by  the  only  test  that  counts :  the  rules  are  not  imposed 
from  above  downward  by  an  arbitrary  authority,  but 
spring  upward  out  of  experience  to  meet  the  problem 
in  hand. 

The  only  reason  why  it  will  be  difficult  for  us  to 
create  here  in  the  United  States  a  thing  of  this  kind 
(and  we  are  certainly  bound  to  do  it  on  peril  of  our 
national  life)  is  that  Americans  are  soft  on  democ- 
racy— lack  hardening  exercise  in  it.  Our  democracy 
hitherto  has  been  too  purely  spiritual. 

But  on  the  tenth  of  last  September  Mr.  Goodwin 
of  Arkansas  introduced  in  the  House  of  Representa- 
tives a  resolution  that  offers  an  entirely  practicable 
means  for  the  precipitation  of  our  creditable  demo- 
cratic sentiments  in  concrete  agricultural  terms.  This 


APPENDIX  273 

resolution  (called  House  Joint-Resolution  No.  344) 
was  referred  to  the  House  Committee  on  Agriculture 
and  ordered  to  be  printed.  It  calls  for  very  affirma- 
tive and  important  action  by  the  President  in  the  di- 
rection of  a  completely  new  deal  for  "the  producers 
and  consumers  of  agricultural  products" — a  phrase 
which  seems  to  include  all  who  are  addicted  to  the  use 
of  food  and  other  things  that  grow. 

On  this  subject  listen  to  David  Lubin,  founder  of 
the  International  Institute  of  Agriculture  at  Rome. 
He  is  the  Californian  who  captured  the  imagination 
of  the  King  of  Italy  and  made  him  build  that  white 
marble  palace  in  the  lofty  Borghesi  Garden  that  looks 
down  upon  the  memorials  of  two  world-empires. 
Lubin's  palace  does  not  celebrate  the  pride  and  dainti- 
ness of  princes  nor  the  pomp  of  any  consecrated 
power.  Yet  it  is  within  the  bounds  of  sober  and  con- 
secutive thought  that  people  may  some  day  make  pil- 
grimages to  this  White  House  in  the  Roman  garden 
as  to  the  originating  headquarters  and  first  Execu- 
tive Mansion  of  that  "third  empire"  of  international 
democracy  concerning  which  Mazzini  and  the  gen- 
erous youth  of  Europe  dreamed  so  many  dreams  in 
the  middle  years  of  the  last  century — but  which  they 
did  not  know  how  to  set  forward.  For  this  Institute 
at  Rome,  which  for  a  dozen  years  Mr.  Lubin  has  been 
nursing  into  expansive  life,  foreshadows  a  kind  of 
government  that  is  more  modern  than  any  other  kind 
— a  government  in  which  science  and  the  principle 
of  equitable  reciprocity  are  applied  to  the  earth- 


274  APPENDIX 

struggle.  The  Institute  is  a  perpetual  congress  of 
delegates  from  more  than  forty  nations,  whose  pres- 
ent business  consists  mainly  in  telling  one  another  the 
exact  truth  about  the  current  yield  of  food-staples  in 
the  several  countries  and  publishing  the  facts  to  the 
world. 

Mr.  Lubin,  speaking  with  a  fine  tang  of  the  Cali- 
fornia climate,  is  telling  the  House  Committee  on 
Agriculture  at  Washington  why  the  farming  interests 
of  the  United  States  ought  to  have  a  solid  and  struc- 
tural organization — not  merely  for  the  sake  of  the 
farmers,  but  for  the  sake  of  the  country.  Hear  him : 

"When  the  city  man  plays  radical  he  seems  to  be 
full  of  dash  and  swear-words,  sand-lot  and  froth; 
nevertheless  he  will  run  into  the  first  hole  when  the 
policeman  gets  after  him.  But  when  the  farmer  turns 
radical  and  lets  loose  he  does  not  run  away;  he  grabs 
a  pitchfork  or  a  scythe  and  goes  on  a  rampage;  he  is 
then  like  the  genie  out  of  a  bottle;  you  can't  put  him 
back  again.  And  when  does  the  farmer  run  loose? 
I  say — with  the  warrant  of  all  history  from  the  ear- 
liest times — whenever  you  transform  him  wholesale 
from  a  land-owner  into  a  renter." 

In  view  of  the  fact  that,  by  national  census,  twenty- 
one  per  cent  of  the  agricultural  land  in  this  country 
was  farmed  by  renters  at  the  beginning  of  this  cen- 
tury, thirty-six  per  cent  ten  years  later  and  most 
likely  forty-five  per  cent  at  the  present  moment  with 
a  much  higher  percentage  in  the  Southern  tier  of 
states  from  Georgia  to  Texas — it  looks  as  if  the 


APPENDIX  275 

genie  might  get  out  of  the  bottle.  Something  ought 
to  be  done  about  it. 

Accordingly  this  House  Committee  is  expected  to 
report  favorably  to  the  coming  session  of  Congress 
this  proposed  joint-resolution  (No.  344)  authorizing 
and  requesting  the  President  to  appoint  a  commission 
whose  business  it  shall  be  "to  adopt  a  plan  of  action 
for  the  effective  organization  of  the  states,  counties 
and  localities  of  the  United  States,  for  the  economic 
distribution  of  the  products  of  the  farm."  The  pro- 
posed planning  body  is  called  a  National  Marketing 
Commission.  It  is  to  be  composed  of  twenty-nine 
members,  fifteen  of  whom  shall  be  farmers,  and  four- 
teen of  whom  shall  be  "selected  because  of  their  emi- 
nence in  commerce,  law,  finance  and  transportation." 
Meeting  in  Washington  at  the  call  of  the  President, 
this  body  is  to  act  as  a  sort  of  Constitutional  Conven- 
tion for  the  organization  of  the  rights  and  powers  of 
the  country  as  they  relate  to  the  fundamental  industry 
and  commerce,  i.  e.,  agriculture  or  the  production  of 
things  that  live  and  grow. 

The  supporters  of  the  resolution  have  in  mind  a 
correlation  of  American  agricultural  interests  in  some 
manner  that  shall  be  as  comprehensive  and  substan- 
tial as  the  structure  of  the  German  Landwirtschafts- 
rat.  They  lay  emphasis  upon  the  democratic  charac- 
ter of  that  system — its  self-government  and  freedom 
from  arbitrary  control.  They  have  therefore  pro- 
vided in  the  resolution  that  the  Commission  shall  have 
"power  to  act  only  as  affecting  individuals  and  or- 


276  r  APPENDIX 

ganizations  that  shall  elect  to  become"  a  part  of  the 
national  system. 

The  point  should  be  insisted  upon  that  agriculture 
is  not  a  mere  heathen,  pagan  or  villainous  matter — 
in  the  primary  and  etymological  sense  of  those  words. 
It  is  because  of  the  social  stupidity  and  political  in- 
competence of  decadent  peoples  that  words  descrip- 
tive of  rural  occupations  have  taken  on  a  color  of 
supercilious  scorn.  Growing  and  mounting  nations 
take  their  farming  artistically,  even  romantically — 
and  with  such  science  as  they  are  able  to  command. 

It  is  a  plain  dictum  of  political  philosophy — im- 
plied in  Mr.  Lubin's  picturesque  words — that  when 
the  legal  control  of  primary  life-sustaining  processes 
passes  definitely  into  the  hands  of  people  who  neither 
sow  nor  reap,  and  who  "don't  know  a  harvester  from 
a  hay-tedder,"  then  the  whole  fabric  of  legality  be- 
comes discredited.  And  the  state  turns  turtle. 

PUBLIC   SERVICE    BANKS 

Here  is  a  statement  of  the  theory  of  a  proposed 
Central  Bank  to  be  established  in  New  York  City, 
for  the  support  and  propagation  of  a  system  of  Pub- 
lic Service  banks  in  the  country  at  large — in  legal  ac- 
cord with  the  Federal  Reserve  Act. 

Since  the  administration  of  credit  has  become  the 
most  vital  of  social  functions,  it  can  no  longer  be 
carried  on  successfully  by  the  trustees  of  a  creditor- 
class.  It  must  pass  into'  the  hands  of  men  who  im- 


APPENDIX  277 

pose  upon  themselves  the  moral  and  intellectual  stand- 
ards and  the  pecuniary  restraints  that  are  becoming 
to  public  administrators. 

A  bank  should  bear  to  a  thousand  farms,  mines  or 
factories — i.  e.,  to  the  whole  working  apparatus  of 
a  community — a  relation  like  that  borne  to  a  single 
plant  by  its  own  head-office.  The  business  of  a  bank 
is  to  organize  the  productive  forces  of  a  locality,  for 
the  maximum  increase  of  wealth.  To  that  end  it 
should  seek  to  lay  upon  the  working  apparatus  of 
the  community  the  lightest  possible  burden  of  debt 
and  interest  charges — in  order  that  capital  may  be 
vitalized  to  the  highest  degree  and  kept  under  the 
control  of  actual  workers  and  organizers  of  industry. 

Credit-administration  is  the  science  and  art  of  low- 
ering the  interest  rate  or  discount-charge — through 
the  elimination  of  avoidable  waste  and  risk. 

The  administrators  are  charged  with  the  task  of  re- 
ducing waste  and  risk  by  seeing  to  it  that  capital  goes 
into  the  hands  of  capable  men  engaged  in  projects 
appropriate  to  the  time  and  place,  and  that  capital 
is  withheld  from  those  that  are  incompetent  and 
from  projects  that  are  inappropriate. 

If  this  science  and  art  could  be  carried  to  perfec- 
tion it  would  be  possible,  as  a  matter  of  abstract  the- 
ory, to  do  an  immeasurable  banking  business  without 
any  reserves  beyond  the  teller's  till-full,  and  with 
interest  and  discounts  sunk  to,  say,  a  fraction  of  one 
per  cent — to  meet  the  cost  of  keeping  books  and 
handling  money.  Since,  however,  this  is  a  world  of 


278  APPENDIX 

error  and  of  mere  approximations,  good  banking  may 
well  be  content  for  the  present  to  lower  the  interest- 
level  to  something  like  three  per  cent,  with  two  per 
cent  or  one  per  cent  as  a  remoter  objective.  On  such 
a  basis  the  United  States  may  be  assured  of  the 
achievement  of  an  economic  energy  much  greater  than 
that  now  current  in  Germany. 

The  initial  capital  for  the  Public  Service  banks 
should  be  easy  to  get,  since  the  security  should  be 
better  than  any  now  extant.  Money  employed,  under 
an  organized  and  single-minded  intelligence,  for  the 
raising  of  productive  power  and  the  lowering  of 
debt-charges,  is  money  employed  in  the  safest  im- 
aginable way. 

On  the  other  hand  the  Public  Service  banks  could 
afford  if  necessary  to  pay  a  higher  rate  for  initial 
capital  than  can  banks  conducted  for  private  profit — 
since  the  difference  between  what  the  bank  takes  from 
the  business  community  and  what  it  could  take,  may 
be  very  great  in  the  former  case  and  is  sure  to  be  next 
to  nothing  in  the  latter. 

From  such  theoretical  considerations  it  appears 
that  nothing  has  been  lacking  to  normal  and  con- 
structive banking  in  this  country,  and  to  a  general 
mobilization  of  our  dead-locked  industrial  forces — 
except  understanding,  and  an  association  of  substan- 
tial men. 

These  seem  no  longer  to  be  lacking. 


&y 


\ 


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